[] AN INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF NATIONS.

CHAP. I. Of the Principle of the commercial, or mercantile Syſtem.

THAT wealth conſiſts in money, or in gold and ſilver, is a popular notion which naturally ariſes from the double function of money, as the inſtrument of commerce, and as the meaſure of value. In conſequence of its being the inſtrument of commerce, when we have money we can more readily obtain whatever elſe we have occaſion for, than by means of any other commodity. The great affair, we always find, is to get money. When that is obtained, there is no difficulty in making any ſub⯑ſequent purchaſe. In conſequence of its being the meaſure of value, we eſtimate that of all other commodities by the quantity of money which they will exchange for. We ſay of a rich man that he is worth a great deal, and of a poor man that he is worth very little money. A frugal man, or a man eager to be rich, is ſaid to love money; and a careleſs, a generous, or a profuſe man, is ſaid to be indifferent about it. To grow rich is to get money; and wealth and money, in ſhort, are in common language con⯑ſidered as in every reſpect ſynonymous.

A RICH country, in the ſame manner as a rich man, is ſup⯑poſed to be a country abounding in money; and to heap up gold and ſilver in any country is ſuppoſed to be the readieſt way to enrich it. For ſome time after the diſcovery of America, the firſt en⯑quiry of the Spaniards, when they arrived upon any unknown coaſt, uſed to be, if there was any gold or ſilver to be found in the neighbourhood. By the information which they received, they judged whether it was worth while to make a ſettlement there, or if the country was worth the conquering. Plano Carpino, a monk [3] ſent ambaſſador from the king of France to one of the ſons of the famous Gengis Khan, ſays that the Tartars uſed frequently to aſk him if there was plenty of ſheep and oxen in the kingdom of France. Their enquiry had the ſame object with that of the Spaniards. They wanted to know if the country was rich enough to be worth the conquering. Among the Tartars, as among all other nations of ſhepherds, who are generally ignorant of the uſe of money, cattle are the inſtruments of commerce and the meaſures of value. Wealth, therefore, according to them, con⯑ſiſted in cattle, as according to the Spaniards it conſiſted in gold and ſilver. Of the two, the Tartar notion, perhaps, was the neareſt to the truth.

MR. Locke remarks a diſtinction between money and other moveable goods. All other moveable goods, he ſays, are of ſo conſumable a nature that the wealth which conſiſts in them cannot be much depended on, and a nation which abounds in them one year may, without any exportation, but merely by their own waſte and extravagance, be in great want of them the next. Money, on the contrary, is a ſteady friend, which, though it may travel about from hand to hand, yet, if it can be kept from going out of the country, is not very liable to be waſted and con⯑ſumed. Gold and ſilver, therefore, are, according to him, the moſt ſolid and ſubſtantial part of the moveable wealth of a nation, and to multiply thoſe metals ought, he thinks, upon that account, to be the great object of its political oeconomy.

OTHERS admit that if a nation could be ſeparated from all the world, it would be of no conſequence how much, or how little money circulated in it. The conſumable goods which were cir⯑culated by means of this money, would only be exchanged for a greater or a ſmaller number of pieces; but the real wealth or [4] poverty of the country, they allow, would depend altogether upon the abundance or ſcarcity of thoſe conſumable goods. But it is otherwiſe, they think, with countries which have connections with foreign nations, and which are obliged to carry on foreign wars, and to maintain fleets and armies in diſtant countries. This, they ſay, cannot be done, but by ſending abroad money to pay them with; and a nation cannot ſend much money abroad, unleſs it has a good deal at home. Every ſuch nation, therefore, muſt endeavour in time of peace to accumulate gold and ſilver, that, when occaſion requires, it may have wherewithal to carry on foreign wars.

IN conſequence of theſe popular notions, all the different nations of Europe have ſtudied, though to little purpoſe, every poſſible means of accumulating gold and ſilver in their reſpective countries. Spain and Portugal, the proprietors of the principal mines which ſupply Europe with thoſe metals, have either prohibited their expor⯑tation under the ſevereſt penalties, or ſubjected it to a conſiderable duty. The like prohibition ſeems antiently to have made a part of the policy of moſt other European nations. It is even to be found, where we ſhould expect leaſt of all to find it, in ſome old Scotch acts of parliament, which forbid under heavy penalties the car⯑rying gold or ſilver forth of the kingdom. The like policy antiently took place both in France and England.

WHEN thoſe countries became commercial, the merchants found this prohibition, upon many occaſions, extreamly inconvenient. They could frequently buy more advantageouſly with gold and ſilver than with any other commodity, the foreign goods which they wanted either to import into their own, or to carry to ſome other foreign country. They remonſtrated, therefore, againſt this prohibition as hurtful to trade.

[5] THEY repreſented, firſt, that the exportation of gold and ſilver in order to purchaſe foreign goods, did not always diminiſh the quantity of thoſe metals in the kingdom. That, on the contrary, it might frequently increaſe it; becauſe if the conſumption of foreign goods was not thereby increaſed in the country, thoſe goods might be re-exported to foreign countries, and being there ſold for a large profit, might bring back much more treaſure than was originally ſent out to purchaſe them. Mr. Mun com⯑pares this operation of foreign trade to the ſeed time and harveſt of agriculture. ‘"If we only behold," ſays he, "the actions of the huſbandman in the ſeed time when he caſteth away much good corn into the ground, we ſhall account him rather a madman than a huſbandman. But when we conſider his labours in the harveſt, which is the end of his endeavours, we ſhall find the worth and plentiful increaſe of his actions."’

THEY repreſented, ſecondly, that this prohibition could not hinder the exportation of gold and ſilver, which, on account of the ſmallneſs of their bulk in proportion to their value, could eaſily be ſmuggled abroad. That this exportation could only be prevented by a proper attention to, what they called, the balance of trade. That when the country exported to a greater value than it imported, a balance became due to it from foreign nations, which was neceſ⯑ſarily paid to it in gold and ſilver, and thereby increaſed the quan⯑tity of thoſe metals in the kingdom. But that when it imported to a greater value than it exported, a contrary balance became due to foreign nations, which was neceſſarily paid to them in the ſame manner, and thereby diminiſhed that quantity. That in this caſe to prohibit the exportation of thoſe metals could not prevent it, but only, by making it more dangerous, render it more expenſive. That the exchange was thereby turned more againſt the country which owed the balance, than it otherwiſe might have been; the merchant who purchaſed a bill upon the foreign country being [6] obliged to pay the banker who ſold it, not only for the natural riſk, trouble and expence of ſending the money thither, but for the extraordinary riſk ariſing from the prohibition. But that the more the exchange was againſt any country, the more the balance of trade became neceſſarily againſt it; the money of that country becoming neceſſarily of ſo much leſs value, in compariſon with that of the country to which the balance was due. That if the exchange between England and Holland, for example, was five per cent. againſt England, it would require a hundred and five ounces of ſilver in England to purchaſe a bill for a hundred ounces of ſilver in Holland: that a hundred and five ounces of ſilver in England, therefore, would be worth only a hundred ounces of ſilver in Holland, and would purchaſe only a proportionable quan⯑tity of Dutch goods: but that a hundred ounces of ſilver in Hol⯑land, on the contrary, would be worth a hundred and five ounces in England, and would purchaſe a proportionable quantity of Engliſh goods: That the Engliſh goods which were ſold to Holland would be ſold ſo much cheaper; and the Dutch goods which were ſold to England, ſo much dearer, by the difference of the ex⯑change; that the one would draw ſo much leſs Dutch money to England, and the other ſo much more Engliſh money to Holland, as this difference amounted to: and that the balance of trade, therefore, would neceſſarily be ſo much more againſt England, and would require a greater balance of gold and ſilver to be ex⯑ported to Holland.

THOSE arguments were partly ſolid and partly ſophiſtical. They were ſolid ſo far as they aſſerted that the exportation of gold and ſilver in trade might frequently be advantageous to the country. They were ſolid too in aſſerting that no prohibition could prevent their exportation, when private people found any advantage in ex⯑porting them. But they were ſophiſtical in ſuppoſing, that either [7] to preſerve or to augment the quantity of thoſe metals required more the attention of government, than to preſerve or to augment the quantity of any other uſeful commodities, which the freedom of trade, without any ſuch attention, never fails to ſupply in the proper quantity. They were ſophiſtical too, perhaps, in aſſert⯑ing that the high price of exchange neceſſarily increaſed, what they called, the unfavourable balance of trade, or occaſioned the ex⯑portation of a greater quantity of gold and ſilver. That high price, indeed, was extremely diſadvantageous to the merchants who had any money to pay in foreign countries. They paid ſo much dearer for the bills which their bankers granted them upon thoſe countries. But though the riſk ariſing from the prohibition might occaſion ſome extraordinary expence to the bankers, it would not neceſſarily carry any more money out of the country. This expence would generally be all laid out in the country, in ſmug⯑gling the money out of it, and could ſeldom occaſion the export⯑ation of a ſingle ſix-pence beyond the preciſe ſum drawn for. The high price of exchange too would naturally diſpoſe the mer⯑chants to endeavour to make their exports nearly balance their im⯑ports, in order that they might have this high exchange to pay upon as ſmall a ſum as poſſible. The high price of exchange, therefore, would tend, not to increaſe, but to diminiſh, what they called, the unfavourable balance of trade, and conſequently the exportation of gold and ſilver.

SUCH as they were, however, thoſe arguments convinced the people to whom they were addreſſed. They were addreſſed by merchants to parliaments, and to the councils of princes, to nobles and to country gentlemen; by thoſe who were ſuppoſed to underſtand trade, to thoſe who were conſcious to themſelves that they knew nothing about the matter. That foreign trade enriched the country, experience demonſtrated to the nobles and country [8] gentlemen, as well as to the merchants; but how, or in what manner, none of them well knew. The merchants knew perfectly in what manner it enriched themſelves. It was their buſineſs to know it. But to know in what manner it enriched the country, was no part of their buſineſs. This ſubject never came into their conſideration, but when they had occaſion to apply to their country for ſome change in the laws relating to foreign trade. It then became neceſſary to ſay ſomething about the beneficial effects of foreign trade, and the manner in which thoſe effects were obſtructed by the laws as they then ſtood. To the judges who were to decide the buſineſs, it appeared a moſt ſatisfactory account of the matter, when they were told that foreign trade brought money into the country, but that the laws in queſtion hindered it from bringing ſo much as it otherwiſe would do. Thoſe arguments therefore produced the wiſhed-for effect. The prohibition of exporting gold and ſilver was in France and England confined to the coin of thoſe reſpective countries. The exportation of foreign coin and of bullion was made free. In Holland, and in ſome other places, this liberty was extended even to the coin of the country. The attention of government was turned away from guarding againſt the exportation of gold and ſilver, to watch over the balance of trade, as the only cauſe which could occaſion any augmentation or diminution of thoſe metals. From one fruitleſs care it was turned away to an⯑other care much more intricate, much more embarraſſing, and juſt equally fruitleſs. The title of Mun's book, England's Treaſure in Foreign Trade, became a fundamental maxim in the political oeconomy, not of England only, but of all other commercial countries. The inland or home trade, the moſt important of all, the trade in which an equal capital affords the greateſt revenue and creates the greateſt employment to the people of the country, was conſidered as ſubſidiary only to foreign trade. It neither brought money into the country, it was ſaid, nor carried any out of it. [9] The country therefore could never become either richer or poorer by means of it, except ſo far as its proſperity or decay might indirectly influence the ſtate of foreign trade.

A COUNTRY that has no mines of its own muſt undoubtedly draw its gold and ſilver from foreign countries, in the ſame manner as one that has no vineyards of its own muſt draw its wines. It does not ſeem neceſſary, however, that the attention of government ſhould be more turned towards the one than towards the other object. A country that has wherewithal to buy wine, will always get the wine which it has occaſion for; and a country that has wherewithal to buy gold and ſilver, will never be in want of thoſe metals. They are to be bought for a certain price like all other commodities, and as they are the price of all other commodities, ſo all other com⯑modities are the price of thoſe metals. We truſt with perfect ſecu⯑rity that the freedom of trade, without any attention of govern⯑ment, will always ſupply us with the wine which we have occaſion for: and we may truſt with equal ſecurity that it will always ſup⯑ply us with all the gold and ſilver which we can afford to purchaſe or to employ, either in circulating our commodities or in other uſes.

THE quantity of every commodity which human induſtry can either purchaſe or produce, naturally regulates itſelf in every country according to the effectual demand, or according to the demand of thoſe who are willing to pay the whole rent, labour, and profits which muſt be paid in order to prepare and bring it to market. But no commodities regulate themſelves more eaſily or more exactly accord⯑ing to this effectual demand than gold and ſilver; becauſe on account of the ſmall bulk and great value of thoſe metals, no commodities can be more eaſily tranſported from one place to another, from the places where they are cheap, to thoſe where they are dear, from the [10] places where they exceed, to thoſe where they fall ſhort of this ef⯑fectual demand. If there was in England, for example, an effectual demand for an additional quantity of gold, a packet-boat could bring from Liſbon, or from wherever elſe it was to be had, fifty tuns of gold, which could be coined into more than five mil⯑lions of guineas. But if there was an effectual demand for grain to the ſame value, to import it would require, at five guineas a tun, a million of tuns of ſhipping, or a thouſand ſhips of a thouſand tuns each. The navy of England would not be ſuf⯑ficient.

WHEN the quantity of gold and ſilver imported into any country exceeds the effectual demand, no vigilance of government can prevent their exportation. All the ſanguinary laws of Spain and Portugal are not able to keep their gold and ſilver at home. The continual importations from Peru and Brazil exceed the effectual demand of thoſe countries, and ſink the price of thoſe metals there below that in the neighbouring countries. If, on the contrary, in any particular country their quantity fell ſhort of the effectual demand, ſo as to raiſe their price above that in the neighbouring countries, the government would have no occaſion to take any pains to import them. If it was even to take pains to prevent their importation, it would not be able to effectuate it. Thoſe metals, when the Spartans had got wherewithal to purchaſe them, broke through all the barriers which the laws of Lycurgus oppoſed to their entrance into Lacedemon. All the ſanguinary laws of the cuſtoms, are not able to prevent the importation of the teas of the Dutch and Gottenburg Eaſt India companies; becauſe ſomewhat cheaper than thoſe of the Britiſh company. A pound of tea, however, is about a hundred times the bulk of one of the higheſt prices, ſixteen ſhillings, that is commonly paid for it in ſilver, and more than two thouſand times the bulk of the [11] ſame price in gold, and conſequently juſt ſo many times more dif⯑ficult to ſmuggle.

IT is partly owing to the eaſy tranſportation of gold and ſilver from the places where they abound to thoſe where they are wanted, that the price of thoſe metals does not fluctuate continually like that of the greater part of other commodities, which are hindered by their bulk from ſhifting their ſituation, when the market happens to be either over or underſtocked with them. The price of thoſe metals, indeed, is not altogether exempted from variation, but the changes to which it is liable are generally ſlow, gradual, and uni⯑form. In Europe, for example, it is ſuppoſed, without much foundation perhaps, that, during the courſe of the preſent and preceeding century, they have been conſtantly but gradually ſink⯑ing in their value, on account of the continual importations from the Spaniſh Weſt Indies. But to make any ſudden change in the price of gold and ſilver, ſo as to raiſe or lower at once, ſenſibly and remarkably, the money price of all other commodities, re⯑quires ſuch a revolution in commerce as that occaſioned by the diſcovery of America.

IF notwithſtanding all this, gold and ſilver ſhould at any time fall ſhort in a country which has wherewithal to purchaſe them, there are more expedients for ſupplying their place, than that of almoſt any other commodity. If the materials of manufacture are wanted, induſtry muſt ſtop. If proviſions are wanted, the people muſt ſtarve. But if money is wanted, barter will ſupply its place, though with a good deal of inconveniency. Buying and ſelling upon credit, and the different dealers compenſating their credits with one another, once a month or once a year, will ſupply it with leſs inconveniency. A well regulated paper money will ſupply it, not only without any inconveniency, but with very [12] great advantages. Upon every account, therefore, the attention of government never was ſo unneceſſarily employed, as when di⯑rected to watch over the preſervation or increaſe of the quantity of money in any country.

No complaint, however, is more common than that of a ſcarcity of money. Money, like wine, muſt always be ſcarce with thoſe who have neither wherewithal to buy it, nor credit to borrow it. Thoſe who have either, will ſeldom be in want either of the money, or of the wine which they have occaſion for. This complaint; however, of the ſcarcity of money, is not always confined to im⯑provident ſpendthrifts. It is ſometimes general through a whole mercantile town, and the country in its neighbourhood. Over⯑trading is the common cauſe of it. Sober men, whoſe projects have been diſproportioned to their capitals, are as likely to have neither wherewithal to buy money, nor credit to borrow it, as pro⯑digals whoſe expence has been diſproportioned to their revenue. Before their projects can be brought to bear, their ſtock is gone, and their credit with it. They run about everywhere to borrow money, and every body tells them that they have none to lend. Even ſuch general complaints of the ſcarcity of money do not always prove that the uſual number of gold and ſilver pieces are not circulating in the country, but that many people want thoſe pieces who have nothing to give for them. When the profits of trade happen to be greater than ordinary, overtrading becomes a general error both among great and ſmall dealers. They do not always ſend more money abroad than uſual, but they buy upon credit both at home and abroad, an unuſual quantity of goods, which they ſend to ſome diſtant market, in hopes that the returns will come in before the demand for payment. The demand comes before the returns, and they have nothing at hand, with which they can either pur⯑chaſe money, or give ſolid ſecurity for borrowing. It is not any [13] ſcarcity of gold and ſilver, but the difficulty which ſuch people find in borrowing, and which their creditors find in getting payment, that occaſions the general complaint of the ſcarcity of money.

IT would be too ridiculous to go about ſeriouſly to prove, that wealth does not conſiſt in money, or in gold and ſilver; but in what money purchaſes, and is valuable only for purchaſing. Money, no doubt, makes always a part of the national capital; but it has already been ſhown that it generally makes but a ſmall part, and always the moſt unprofitable part of it.

IT is not becauſe wealth conſiſts more eſſentially in money than in goods, that the merchant finds it generally more eaſy to buy goods with money, than to buy money with goods; but becauſe money is the known and eſtabliſhed inſtrument of commerce, for which every thing is readily given in exchange, but which is not always with equal readineſs to be got in exchange for every thing. The greater part of goods beſides are more periſhable than money, and he may frequently ſuſtain a much greater loſs by keeping them. When his goods are upon hand too, he is more liable to ſuch demands for money as he may not be able to anſwer, than when he has got their price in his coffers. Over and above all this, his profit ariſes more directly from ſelling than from buying, and he is upon all theſe accounts generally much more anxious to exchange his goods for money, than his money for goods. But though a particular merchant, with abundance of goods in his warehouſe, may ſometimes be ruined by not being able to ſell them in time, a nation or country is not liable to the ſame accident. The whole capital of a merchant frequently conſiſts in periſhable goods deſtined for purchaſing money. But it is but a very ſmall part of the annual produce of the land and labour of a country which can ever be deſtined for purchaſing gold and ſilver [14] from their neighbours. The far greater part is circulated and conſumed among themſelves; and even of the ſurplus which is ſent abroad, the greater part is generally deſtined for the purchaſe of other foreign goods. Though gold and ſilver, therefore, could not be had in exchange for the goods deſtined to purchaſe them, the nation would not be ruined. It might, indeed, ſuffer ſome loſs and inconveniency, and be forced upon ſome of thoſe expe⯑dients which are neceſſary for ſupplying the place of money. The annual produce of its land and labour, however, would be the ſame, or very nearly the ſame, as uſual, becauſe the ſame, or very nearly the ſame conſumable capital would be employed in maintaining it. And though goods do not always draw money ſo readily as money draws goods, in the long-run they draw it more neceſſarily than even it draws them. Goods can ſerve many other purpoſes beſides purchaſing money, but money can ſerve no other purpoſe beſides purchaſing goods. Money, therefore, neceſſarily runs after goods, but goods do not always or neceſſarily run after money. The man who buys, does not always mean to ſell again, but frequently to uſe or to conſume; whereas he who ſells, always means to buy again. The one may frequently have done the whole, but the other can never have done more than the one-half of his buſineſs. It is not for its own ſake that men deſire money, but for the ſake of what they can purchaſe with it.

CONSUMABLE commodities, it is ſaid, are ſoon deſtroyed; where⯑as gold and ſilver are of a more durable nature, and, were it not for this continual exportation, might be accumulated for ages to⯑gether, to the incredible augmentation of the real wealth of the country. Nothing, therefore, it is pretended, can be more diſ⯑advantageous to any country, than the trade which conſiſts in the exchange of ſuch laſting for ſuch periſhable commodities. We do not, however, reckon that trade diſadvantageous which conſiſts [15] in the exchange of the hardware of England for the wines of France; and yet hardware is a very durable commodity, and was it not for this continual exportation, might too be accumulated for ages together, to the incredible augmentation of the pots and pans of the country. But it readily occurs that the number of ſuch utenſils is in every country neceſſarily limited by the uſe which there is for them; that it would be abſurd to have more pots and pans than were neceſſary for cooking the victuals uſually conſumed there; and that if the quantity of victuals were to in⯑creaſe, the number of pots and pans would readily increaſe along with it, a part of the increaſed quantity of victuals being employed in purchaſing them, or in maintaining an additional number of workmen whoſe buſineſs it was to make them. It ſhould as readily occur that the quantity of gold and ſilver is in every country limited by the uſe which there is for thoſe metals; that their uſe conſiſts in circulating commodities as coin, and in affording a ſpecies of houſhold furniture as plate; that the quantity of coin in every country is regulated by the value of the commodities which are to be circulated by it: increaſe that value, and immediately a part of it will be ſent abroad to purchaſe, wherever it is to be had, the additional quantity of coin requiſite for circulating them: that the quantity of plate is regulated by the number and wealth of thoſe private families who chuſe to indulge themſelves in that ſort of magnificence: increaſe the number and wealth of ſuch families, and a part of this increaſed wealth will moſt probably be employed in purchaſing, wherever it is to be found, an addi⯑tional quantity of plate: that to attempt to increaſe the wealth of any country, either by introducing or by detaining in it an unneceſſary quantity of gold and ſilver, is as abſurd as it would be to attempt to increaſe the good cheer of private families, by obliging them to keep an unneceſſary number of kitchen utenſils. As the expence of purchaſing thoſe unneceſſary utenſils would diminiſh [16] inſtead of increaſing either the quantity or goodneſs of the family proviſions; ſo the expence of purchaſing an unneceſſary quantity of gold and ſilver muſt, in every country, as neceſſarily diminiſh the wealth which feeds, cloaths and lodges, which maintains and employs the people. Gold and ſilver, whether in the ſhape of coin or of plate, are utenſils, it muſt be remembered, as much as the furniture of the kitchen. Increaſe the uſe for them, increaſe the conſumable commodities which are to be circulated, managed and prepared by means of them, and you will infallibly increaſe the quantity; but if you attempt, by extraordinary means, to in⯑creaſe the quantity, you will as infallibly diminiſh the uſe and even the quantity too, which in thoſe metals can never be greater than what the uſe requires. Were they ever to be accumulated beyond this quantity, their tranſportation is ſo eaſy, and the loſs which attends their lying idle and unemployed ſo great, that no law could prevent their being immediately ſent out of the country.

IT is not always neceſſary to accumulate gold and ſilver, in order to enable a country to carry on foreign wars, and to main⯑tain fleets and armies in diſtant countries. Fleets and armies are maintained, not with gold and ſilver, but with conſumable goods. The nation which, from the annual produce of its domeſtic induſtry, from the annual revenue ariſing out of its lands, labour and con⯑ſumable ſtock, has wherewithal to purchaſe thoſe conſumable goods in diſtant countries, can maintain foreign wars there.

A NATION may purchaſe the pay and proviſions of an army in a diſtant country three different ways; by ſending abroad either, firſt, ſome part of its accumulated gold and ſilver; or, ſecondly, ſome part of the annual produce of its manufactures; or laſt of all, ſome part of its annual rude produce.

[17] THE gold and ſilver which can properly be conſidered as accumu⯑lated or ſtored up in any country, may be diſtinguiſhed into three parts; firſt, the circulating money; ſecondly, the plate of private families; and laſt of all, the money which may have been collected by many years parſimony, and laid up in the treaſury of the prince.

IT can ſeldom happen that much can be ſpared from the circulating money of the country; becauſe in that there can ſeldom be much redundancy. The value of goods annually bought and ſold in any country requires a certain quantity of money to circulate and diſtribute them to their proper conſumers, and can give employment to no more. The channel of circulation neceſſa⯑rily draws to itſelf a ſum ſufficient to fill it, and never admits any more. Something, however, is generally withdrawn from this channel in the caſe of foreign war. By the great number of people who are maintained abroad, fewer are maintained at home. Fewer goods are circulated there, and leſs money becomes neceſſary to circulate them. An extraordinary quantity of paper money, of ſome ſort or other too, ſuch as exchequer notes, navy bills, and bank bills in England, is generally iſſued upon ſuch occaſions, and by ſupplying the place of circulating gold and ſilver, gives an opportunity of ſending a greater quantity of it abroad. All this, however, could afford but a poor reſource for maintaining a foreign war, of great expence and ſeveral years duration.

THE melting down the plate of private families, has upon every occaſion been found a ſtill more inſignificant one. The French, in the beginning of the laſt war, did not derive ſo much advantage from this expedient as to compenſate the loſs of the faſhion.

THE accumulated treaſures of the prince have, in former times, afforded a much greater and more laſting reſource. In the preſent times, if you except the king of Pruſſia, to accumulate treaſure ſeems to be no part of the policy of European princes.

[18] THE funds which maintained the foreign wars of the preſent century, the moſt expenſive perhaps which hiſtory records, ſeem to have had little dependency upon the exportation either of the circulating money, or of the plate of private families, or of the treaſure of the prince. The laſt French war coſt Great Britain upwards of ninety millions, including not only the ſeventy-five millions of new debt that was contracted, but the additional two ſhillings in the pound land tax, and what was annually borrowed of the ſinking fund. More than two-thirds of this expence was laid out in diſtant countries; in Germany, Portugal, America, in the ports of the Mediterranean, in the Eaſt and Weſt Indies. The kings of England had no accumulated treaſure. We never heard of any extraordinary quantity of plate being melted down. The circulating gold and ſilver of the country had not been ſup⯑poſed to exceed eighteen millions. Since the late recoinage of the gold, however, it is believed to have been a good deal under-rated. Let us ſuppoſe, therefore, according to the exaggerated computation of Mr. Horſely, that, gold and ſilver together, it amounted to thirty millions. Had the war been carried on, by means of our money, the whole of it muſt, even according to this computation, have been ſent out and returned again at leaſt twice, in a period of between ſix and ſeven years. Should this be ſuppoſed, it would afford the moſt deciſive argument to demonſtrate how unneceſſary it is for government to watch over the preſervation of money, ſince upon this ſuppoſition the whole money of the country muſt have gone from it and returned to it again, two different times in ſo ſhort a period, without any body's knowing any thing of the matter. The channel of circulation, however, never appeared more empty than uſual during any part of this period. Few peo⯑ple wanted money who had wherewithal to pay for it. The profits of foreign trade, indeed, were greater than uſual during the whole war; but eſpecially towards the end of it. This occaſioned, what it always occaſions, a general overtrading in all the ports of Great Britain; and this again occaſioned the uſual complaint of the [19] ſcarcity of money, which always follows overtrading. Many people wanted it, who had neither wherewithal to buy it, nor credit to borrow it; and becauſe the debtors found it difficult to borrow, the creditors found it difficult to get payment. Gold and ſilver, however, were generally to be had for their value, by thoſe who had that value to give for them.

THE enormous expence of the late war, therefore, muſt have been chiefly defrayed, not by the exportation of gold and ſilver, but by that of Britiſh commodities of ſome kind or other. When the government, or thoſe who acted under them, contracted with a merchant for a remittance to ſome foreign country, he would naturally endeavour to pay his foreign correſpondent, upon whom he had granted a bill, by ſending abroad rather commodities than gold and ſilver. If the commodities of Great Britain were not in demand in that country, he would endeavour to ſend them to ſome other country, in which he could purchaſe a bill upon that country. The tranſportation of commodities, when properly fuited to the market, is always attended with a conſiderable profit; whereas that of gold and ſilver is ſcarce ever attended with any. When thoſe metals are ſent abroad in order to purchaſe foreign commodities, the merchant's profit ariſes, not from the purchaſe, but from the ſale of the returns. But when they are ſent abroad merely to pay a debt, he gets no returns, and conſequently no profit. He naturally, therefore, exerts his invention to find out a way of paying his foreign debts, rather by the exportation of commodities than by that of gold and ſilver. The great quantity of Britiſh goods ex⯑ported during the courſe of the late war, without bringing back any returns, is accordingly remarked by the author of The Preſent State of the Nation.

BESIDES the three ſorts of gold and ſilver above mentioned, there is in all great commercial countries a good deal of bullion alter⯑nately [20] imported and exported for the purpoſes of foreign trade. This bullion, as it circulates among different commercial countries in the ſame manner as the national coin circulates in every particular country, may be conſidered as the money of the great mercantile republick. The national coin receives its movement and di⯑rection from the commodities circulated within the precincts of each particular country: the money of the mercantile republick, from thoſe circulated between different countries. Both are em⯑ployed in facilitating exchanges, the one between different indivi⯑duals of the ſame, the other between thoſe of different nations. Part of this money of the great mercantile republick may have been, and probably was, employed in carrying on the late war. In time of a general war, it is natural to ſuppoſe that a movement and direction ſhould be impreſſed upon it, different from what it uſually follows in profound peace; that it ſhould circulate more about the ſeat of the war, and be more employed in purchaſing there, and in the neighbouring countries, the pay and proviſions of the different armies. But whatever part of this money of the mercantile republick, Great Britain may have annually em⯑ployed in this manner, it muſt have been annually purchaſed, either with Britiſh commodities, or with ſomething elſe that had been pur⯑chaſed with them; which ſtill brings us back to commodities, to the annual produce of the land and labour of the country, as the ultimate reſources which enabled us to carry on the war. It is natural indeed to ſuppoſe, that ſo great an annual expence muſt have been de⯑frayed from a great annual produce. The expence of 1761, for example, amounted to more than nineteen millions. No accumulation could have ſupported ſo great an annual profuſion. There is no annual produce even of gold and ſilver which could have ſupported it. The whole gold and ſilver annually im⯑ported into both Spain and Portugal, according to the beſt accounts, does not commonly much exceed ſix millions ſterling, [21] which, in ſome years, would ſcarce have paid four months expence of the late war.

THE commodities moſt proper for being tranſported to diſtant countries, in order to purchaſe there, either the pay and proviſions of an army, or ſome part of the money of the mercantile republick to be employed in purchaſing them, ſeem to be the finer and more improved manufactures; ſuch as contain a great value in a ſmall bulk, and can, therefore, be exported to a great diſtance at little expence. A country whoſe induſtry produces a great annual ſurplus of ſuch manufactures, which are uſually exported to foreign countries, may carry on for many years a very expenſive foreign war, without either exporting any conſiderable quantity of gold and ſilver, or even having any ſuch quantity to export. A con⯑ſiderable part of the annual ſurplus of its manufactures muſt, indeed, in this caſe be exported, without bringing back any returns. Some part of it, however, may ſtill continue to bring back a return. The manufacturers, during the war, will have a double demand upon them, and be called upon, firſt, to work up goods to be ſent abroad, for paying the bills drawn upon foreign countries for the pay and proviſions of the army; and, ſecondly, to work up ſuch as are neceſſary for purchaſing the common returns that had uſually been conſumed in the country. In the midſt of the moſt deſtructive foreign war, therefore, the greater part of manufactures may frequently flouriſh greatly; and, on the contrary, they may decline on the return of the peace. They may flouriſh amidſt the ruin of their country, and begin to decay upon the return of its proſperity. The different ſtate of many different branches of the Britiſh manufactures during the late war, and for ſome time after the peace, may ſerve as an illuſtration of what has been juſt now ſaid.

[22] No foreign war of great expence or duration could conveniently be carried on by the exportation of the rude produce of the ſoil. The expence of ſending ſuch a quantity of it to a foreign country as might purchaſe the pay and proviſions of an army, would be too great. Few countries too produce much more rude produce than what is ſufficient for the ſubſiſtence of their own inhabitants. To ſend abroad any great quantity of it therefore, would be to ſend abroad a part of the neceſſary ſubſiſtence of the people. It is otherwiſe with the exportation of manufactures. The maintenance of the people employed in them is kept at home, and only the ſur⯑plus part of their work is exported. Mr. Hume frequently takes notice of the inability of the antient kings of England to carry on, without interruption, any foreign war of long duration. The Engliſh, in thoſe days, had nothing wherewithal to purchaſe the pay and proviſions of their armies in foreign countries, but either the rude produce of the ſoil, of which no conſiderable part could be ſpared from the home conſumption, or a few manufactures of the coarſeſt kind, of which, as well as of the rude produce, the tranſ⯑portation was too expenſive. This inability did not ariſe from the want of money, but of the finer and more improved manufactures. Buying and ſelling was tranſacted by means of money in England then, as well as now. The quantity of circulating money muſt have borne the ſame proportion to the number and value of pur⯑chaſes and ſales uſually tranſacted at that time, which it does to thoſe tranſacted at preſent; or rather it muſt have borne a greater proportion, becauſe there was then no paper, which now occupies a great part of the employment of gold and ſilver. Among nations to whom commerce and manufactures are little known, the ſovereign, upon extraordinary occaſions, can ſeldom draw any conſiderable aid from his ſubjects, for reaſons which ſhall be explained hereafter. It is in ſuch countries, therefore, that he generally endeavours to accumulate a treaſure, as the only reſource againſt ſuch emergencies. Independant of this neceſſity, he is in [23] ſuch a ſituation naturally diſpoſed to the parſimony requiſite for accumulation. In that ſimple ſtate, the expence even of a ſove⯑reign is not directed by the vanity which delights in the gaudy finery of a court, but is employed in bounty to his tenants, and hoſ⯑pitality to his retainers. But bounty and hoſpitality very ſeldom lead to extravagance; though vanity almoſt always does. Every Tartar chief, accordingly, has a treaſure. The treaſures of Ma⯑zepa, chief of the Coſſacks in the Ukraine, the famous ally of Charles the XIIth, are ſaid to have been very great. The French kings of the Merovingian race had all treaſures. When they divided their kingdom among their different children, they divided their treaſure too. The Saxon princes, and the firſt kings after the conqueſt, ſeem likewiſe to have accumulated treaſures. The firſt exploit of every new reign was commonly to ſeize the treaſure of the preceeding king, as the moſt eſſential meaſure for ſecuring the ſucceſſion. The ſovereigns of improved and com⯑mercial countries are not under the ſame neceſſity of accumulating treaſures, becauſe they can generally draw from their ſubjects ex⯑traordinary aids upon extraordinary occaſions. They are likewiſe leſs diſpoſed to do ſo. They naturally, perhaps neceſſarily, follow the mode of the times, and their expence comes to be regulated by the ſame extravagant vanity which directs that of all the other great proprietors in their dominions. The inſignificant pageantry of their court becomes every day more brilliant, and the expence of it not only prevents accumulation, but frequently encroaches upon the funds deſtined for more neceſſary expences. What Dercyllidas ſaid of the court of Perſia, may be applied to that of ſeveral European princes, that he ſaw there much ſplendor but little ſtrength, and many ſervants but few ſoldiers.

THE importation of gold and ſilver is not the principal, much leſs the ſole benefit which a nation derives from its foreign trade. [24] Between whatever places foreign trade is carried on, they all of them derive two diſtinct benefits from it. It carries out that ſur⯑plus part of the produce of their land and labour for which there is no demand among them, and brings back in return for it ſome⯑thing elſe for which there is a demand. It gives a value to their ſuperfluities, by exchanging them for ſomething elſe, which may ſatisfy a part of their wants, and increaſe their enjoyments. By means of it, the narrowneſs of the home market does not hinder the diviſion of labour in any particular branch of art or manu⯑facture from being carried to the higheſt perfection. By opening a more extenſive market for whatever part of the produce of their labour may exceed the home conſumption, it encourages them to improve its productive powers, and to augment its annual produce to the utmoſt, and thereby increaſe the real revenue and wealth of the ſociety. Theſe great and important ſervices foreign trade is continually occupied in performing, to all the different countries between which it is carried on. They all derive great benefit from it, though that in which the merchant reſides generally derives the greateſt, as he is generally more employed in ſupplying the wants, and carrying out the ſuperfluities of his own, than of any other par⯑ticular country. To import the gold and ſilver which may be wanted, into the countries which have no mines, is, no doubt, a part of the buſineſs of foreign commerce. It is, however, a moſt inſig⯑nificant part of it. A country which carried on foreign trade merely upon this account, could ſcarce have occaſion to freight a ſhip in a century.

IT is not by the importation of gold and ſilver, that the diſ⯑covery of America has enriched Europe. By the abundance of the American mines, thoſe metals have become cheaper. A ſervice of plate can now be purchaſed for about a third part of the corn, or a third part of the labour, which it would have coſt in the [25] fifteenth century. With the ſame annual expence of labour and commodities, Europe can annually purchaſe about three times the quantity of plate which it could have purchaſed at that time. But when a commodity comes to be ſold for a third part of what had been its uſual price, not only thoſe who purchaſed it before can purchaſe three times their former quantity, but it is brought down to the level of a much greater number of purcha⯑ſers; perhaps to more than ten, perhaps to more than twenty times the former number. So that there may be in Europe at preſent, not only more than three times, but more than twenty or thirty times the quantity of plate which would have been in it, even in its preſent ſtate of improvement, had the diſcovery of the American mines never been made. So far Europe has, no doubt, gained a real conveniency, though ſurely a very trifling one. The cheapneſs of gold and ſilver renders thoſe metals rather leſs fit for the purpoſes of money than they were before. In order to make the ſame purchaſes, we muſt load ourſelves with a greater quantity of them, and carry about a ſhilling in our pocket where a groat would have done before. It is difficult to ſay which is moſt trifling, this inconveniency, or the oppoſite conveniency. Neither the one nor the other could have made any very eſſential change in the ſtate of Europe. The diſcovery of America, how⯑ever, certainly made a moſt eſſential one. By opening a new and inexhauſtible market to all the commodities of Europe, it gave occaſion to new diviſions of labour and improvements of art, which, in the narrow circle of the antient commerce, could never have taken place for want of a market to take off the greater part of their produce. The productive powers of labour were im⯑proved, and its produce increaſed in all the different countries of Europe, and together with it the real revenue and wealth of the inhabitants. The commodities of Europe were almoſt all new to America, and many of thoſe of America were new to Europe. [26] A new ſett of exchanges, therefore, began to take place which had never been thought of before, and which ſhould naturally have proved as advantageous to the new, as it certainly did to the old continent. The ſavage injuſtice of the Europeans rendered an event, which ought to have been beneficial to all, ruinous and deſtructive to ſeveral of thoſe unfortunate countries.

THE diſcovery of a paſſage to the Eaſt Indies, by the Cape of Good Hope, which happened much about the ſame time, opened, perhaps, a ſtill more extenſive range to foreign commerce than even that of America, notwithſtanding the greater diſtance. There were but two nations in America, in any reſpect ſuperior to ſavages, and theſe were deſtroyed almoſt as ſoon as diſcovered. The reſt were mere ſavages. But the empires of China, Indoſtan, Japan, as well as ſeveral others in the Eaſt Indies, without having richer mines of gold or ſilver, were in every other reſpect much richer, better cultivated, and more advanced in all arts and manufactures than either Mexico or Peru, even though we ſhould credit, what plainly deſerves no credit, the exaggerated accounts of the Spaniſh writers, concerning the antient ſtate of thoſe empires. But rich and civilized nations can always exchange to a much greater value with one another, than with ſavages and barbarians. Europe, however, has hitherto derived much leſs advantage from its com⯑merce with the Eaſt Indies, than from that with America. The Portugueſe monopoliſed the Eaſt India trade to themſelves for about a century, and it was only indirectly and through them, that the other nations of Europe could either ſend out or receive any goods from that country. When the Dutch, in the beginning of the laſt century, began to encroach upon them, they veſted their whole Eaſt India commerce in an excluſive company. The Engliſh, French, Swedes, and Danes, have all followed their example, ſo that no great nation in Europe has ever yet had the benefit of a [27] free commerce to the Eaſt Indies. No other reaſon need be aſſigned why it has never been ſo advantageous as the trade to America, which, between almoſt every nation of Europe and its own colonies, is free to all its ſubjects. The excluſive privileges of thoſe Eaſt India companies, their great riches, the great favour and protection which theſe have prooured them from their reſpective governments, have excited much envy againſt them. This envy has frequently re⯑preſented their trade as altogether pernicious, on account of the great quantities of ſilver, which it every year exports from the countries from which it is carried on. The parties concerned have replied, that their trade, by this continual exportation of ſilver, might, indeed, tend to impoveriſh Europe in general, but not the particular country from which it was carried on; becauſe, by the exportation of a part of the returns to other European countries, it annually brought home a much greater quantity of that metal than it carried out. Both the objection and the reply are founded in the popular notion which I have been juſt now examining. It is, therefore, unneceſſary to ſay any thing further about either. By the annual exportation of ſilver to the Eaſt Indies, plate is probably ſomewhat dearer in Europe than it other⯑wiſe might have been; and coined ſilver probably purchaſes a larger quantity both of labour and commodities. The former of theſe two effects is a very ſmall loſs, the latter a very ſmall advantage; both too inſignificant to deſerve any part of the publick attention. The trade to the Eaſt Indies, by opening a market to the com⯑modities of Europe, or, what comes nearly to the ſame thing, to the gold and ſilver which is purchaſed with thoſe commodities, muſt neceſſarily tend to increaſe the annual production of European commodities, and conſequently the real wealth and revenue of Europe. That it has hitherto increaſed them ſo little, is pro⯑bably owing to the reſtraints which it every where labours under.

[28] I THOUGHT it neceſſary, though at the hazard of being tedious, to examine at full length this popular notion that wealth conſiſts in money, or in gold and ſilver. Money in common language, as I have already obſerved, frequently ſignifies wealth; and this ambiguity of expreſſion has rendered this popular notion ſo fa⯑miliar to us, that even they, who are convinced of its abſurdity, are very apt to forget their own principles, and in the courſe of their reaſonings to take it for granted as a certain and undeniable truth. Some of the beſt Engliſh writers upon commerce ſet out with obſerving, that the wealth of a country conſiſts, not in its gold and ſilver only, but in its lands, houſes, and conſumable goods of all different kinds. In the courſe of their reaſonings, however, the lands, houſes, and conſumable goods ſeem to ſlip out of their memory, and the ſtrain of their argument frequently ſuppoſes that all wealth conſiſts in gold and ſilver, and that to multiply thoſe metals is the great object of national induſtry and commerce.

THE two principles being eſtabliſhed, however, that wealth conſiſted in gold and ſilver, and that thoſe metals could be brought into a country which had no mines only by the balance of trade, or by exporting to a greater value than it imported; it neceſſarily became the great object of political oeconomy to diminiſh as much as poſſible the importation of foreign goods for home-conſump⯑tion, and to increaſe as much as poſſible the exportation of the pro⯑duce of domeſtick induſtry. Its two great engines for enriching the country, therefore, were reſtraints upon importation, and en⯑couragements to exportation.

THE reſtraints upon importation were of two kinds.

FIRST, reſtraints upon the importation of ſuch foreign goods for home-conſumption as could be produced at home, from what⯑ever country they were imported.

[29] SECONDLY, reſtraints upon the importation of goods of almoſt all kinds from thoſe particular countries with which the balance of trade was ſuppoſed to be diſadvantageous.

THOSE different reſtraints conſiſted ſometimes in high duties, and ſometimes in abſolute prohibitions.

EXPORTATION was encouraged ſometimes by drawbacks, ſome⯑times by bounties, ſometimes by advantageous treaties of com⯑merce with foreign ſtates, and ſometimes by the eſtabliſhment of colonies in diſtant countries.

DRAWBACKS were given upon two different occaſions. When the home-manufactures were ſubject to any duty or exciſe, either the whole or a part of it was frequently drawn back upon their exportation; and when foreign goods liable to a duty were im⯑ported, in order to be exported again, either the whole or a part of this duty was ſometimes given back upon ſuch expor⯑tation.

BOUNTIES were given for the encouragement either of ſome beginning manufactures, or of ſuch ſorts of induſtry of other kinds as were ſuppoſed to deſerve particular favour.

BY advantageous treaties of commerce, particular privileges were procured in ſome foreign ſtate for the goods and merchants of the country, beyond what were granted to thoſe of other countries.

BY the eſtabliſhment of colonies in diſtant countries, not only particular privileges, but a monopoly was frequently procured [30] for the goods and merchants of the country which eſtabliſhed them.

THE two ſorts of reſtraints upon importation above mentioned, together with theſe four encouragements to exportation, conſtitute the ſix principal means by which the commercial ſyſtem propoſes to increaſe the quantity of gold and ſilver in any country by turning the balance of trade in its favour. I ſhall conſider each of them in a particular chapter, and without taking much further notice of their ſuppoſed tendency to bring money into the country, I ſhall examine chiefly what are likely to be the effects of each of them upon the annual produce of its induſtry. According as they tend either to increaſe or diminiſh the value of this annual produce, they muſt evidently tend either to increaſe or diminiſh the real wealth and revenue of the country.

CHAP. II. Of Reſtraints upon the Importation of ſuch Goods from Foreign Countries as can be produced at Home.

BY reſtraining either by high duties or by abſolute prohibitions the importation of ſuch goods from foreign countries as can be produced at home, the monopoly of the home-market is more of leſs ſecured to the domeſtick induſtry employed in producing them. Thus the prohibition of importing either live cattle or ſalt proviſions from foreign countries ſecures to the graziers of Great Britain the monopoly of the home-market for butchers⯑meat. The high duties upon the importation of corn, which in times of moderate plenty amount to a prohibition, give a like ad⯑vantage to the growers of that commodity. The prohibition of the importation of foreign woollens is equally favourable to the woollen manufacturers. The ſilk manufacture, though altogether employed upon foreign materials, has lately obtained the ſame advantage. The linen manufacture has not yet obtained it, but is making great ſtrides towards it. Many other ſorts of manu⯑facturers have, in the ſame manner, obtained in Great Britain, either altogether, or very nearly a monopoly againſt their coun⯑trymen.

THAT this monopoly of the home-market frequently gives great encouragement to that particular ſpecies of induſtry which enjoys it, and frequently turns towards that employment a greater ſhare of both the labour and ſtock of the ſociety than would otherwiſe have gone to it, cannot be doubted. But whether it tends either [32] to increaſe the general induſtry of the ſociety, or to give it the moſt advantageous direction, is not, perhaps, altogether ſo cer⯑tain.

THE general induſtry of the ſociety never can exceed what the capital of the ſociety can employ. As the number of workmen that can be kept in employment by any particular perſon muſt bear a certain proportion to his capital, ſo the number of thoſe that can be continually employed by all the members of a great ſociety muſt bear a certain proportion to the whole capital of that ſociety, and never can exceed that proportion. No regulation of commerce can increaſe the quantity of induſtry in any ſociety beyond what its capital can maintain. It can only divert a part of it into a di⯑rection into which it might not otherwiſe have gone; and it is by no means certain that this artificial direction is likely to be more advantageous to the ſociety than that into which it would have gone of its own accord.

EVERY individual is continually exerting himſelf to find out the moſt advantageous employment for whatever capital he can com⯑mand. It is his own advantage, indeed, and not that of the ſo⯑ciety, which he has in view. But the ſtudy of his own advantage naturally, or rather neceſſarily leads him to prefer that employment which is moſt advantageous to the ſociety.

FIRST, every individual endeavours to employ his capital as near home as he can, and conſequently as much as he can in the ſupport of domeſtick induſtry; provided always that he can thereby obtain the ordinary, or not a great deal leſs than the ordinary pro⯑fits of ſtock.

THUS upon equal or nearly equal profits, every wholeſale mer⯑chant naturally prefers the home-trade to the foreign trade of [33] conſumption, and the foreign trade of conſumption to the carrying trade. In the home-trade his capital is never ſo long out of his ſight as it frequently is in the foreign trade of conſumption. He can know better the character and ſituation of the perſons whom he truſts, and if he ſhould happen to be deceived, he knows better the laws of the country from which he muſt ſeek redreſs. In the carrying trade, the capital of the merchant is, as it were, divided between two foreign countries, and no part of it is ever neceſſarily brought home, or placed under his own immediate view and com⯑mand. The capital which an Amſterdam merchant employs in carrying corn from Konnigſberg to Liſbon, and fruit and wine from Liſbon to Konnigſberg, muſt generally be the one-half of it at Konnigſberg and the other half at Liſbon. No part of it need ever come to Amſterdam. The natural reſidence of ſuch a merchant ſhould either be at Konnigſberg or Liſbon, and it can only be ſome very particular circumſtances which can make him prefer the reſidence of Amſterdam. The uneaſineſs, however, which he feels at being ſeparated ſo far from his capital, generally determines him to bring part both of the Konnigſberg goods which he deſtines for the market of Liſbon, and of the Liſbon goods which he deſtines for that of Konnigſberg, to Amſterdam: and though this neceſſarily ſubjects him to a double charge of load⯑ing and unloading, as well as to the payment of ſome duties and cuſtoms, yet for the ſake of having ſome part of his capital always under his own view and command, he willingly ſubmits to this extraordinary charge; and it is in this manner that every country which has any conſiderable ſhare of the carrying trade becomes always the emporium or general market for the goods of all the different countries whoſe trade it carries on. The mer⯑chant, in order to ſave a ſecond loading and unloading, endeavours always to ſell in the home-market as much of the goods of all thoſe different countries as he can, and thus, ſo far as he can, to [34] convert his carrying trade into a foreign trade of conſumption. A merchant, in the ſame manner, who is engaged in the foreign trade of conſumption, when he collects goods for foreign markets, will always be glad, upon equal or nearly equal profits, to ſell as great a part of them at home as he can. He ſaves himſelf the riſk and trouble of exportation, when ſo far as he can, he thus converts his foreign trade of conſumption into a home-trade. Home is in this manner the center, if I may ſay ſo, round which the capitals of the inhabitants of every country are continually cir⯑culating, and towards which they are always tending, though by particular cauſes they may ſometimes be driven off and repelled from it towards more diſtant employments. But a capital em⯑ployed in the home-trade, it has already been ſhown, neceſſarily puts into motion a greater quantity of domeſtick induſtry, and gives revenue and employment to a greater number of the inha⯑bitants of the country, than an equal capital employed in the foreign trade of conſumption: and one employed in the foreign trade of conſumption has the ſame advantage over an equal capital employed in the carrying trade. Upon equal, or only nearly equal profits, therefore, every individual naturally inclines to employ his capital in the manner in which it is likely to afford the greateſt ſupport to domeſtick induſtry, and to give revenue and employ⯑ment to the greateſt number of the people of his own country.

SECONDLY, every individual who employs his capital in the ſupport of domeſtick induſtry, neceſſarily endeavours ſo to direct that induſtry, that its produce may be of the greateſt poſſible value.

THE produce of induſtry is what it adds to the ſubject or ma⯑terials upon which it is employed. In proportion as the value of this produce is great or ſmall, ſo will likewiſe be the profits of the employer. But it is only for the ſake of profit that any man em⯑ploys [35] a capital in the ſupport of induſtry; and he will always, there⯑fore, endeavour to employ it in the ſupport of that induſtry of which the produce is likely to be of the greateſt value, or to exchange for the greateſt quantity either of money or of other goods.

BUT the annual revenue of every ſociety is always preciſely equal to the exchangeable value of the whole annual produce of its in⯑duſtry, or rather is preciſely the ſame thing with that exchangeable value. As every individual, therefore, endeavours as much as he can both to employ his capital in the ſupport of domeſtick induſtry, and ſo to direct that induſtry that its produce may be of the greateſt value; every individual neceſſarily labours to render the annual re⯑venue of the ſociety as great as he can. He generally, indeed, neither intends to promote the publick intereſt, nor knows how much he is promoting it. By preferring the ſupport of domeſtick to that of foreign induſtry he intends only his own ſecurity; and by directing that induſtry in ſuch a manner as its produce may be of the greateſt value, he intends only his own gain, and he is in this, as in many other caſes, led by an inviſible hand to promote an end which was no part of his intention. Nor is it always the worſe for the ſociety that it was no part of it. By purſuing his own intereſt he frequently promotes that of the ſociety more effectually than when he really intends to promote it. I have never known much good done by thoſe who affected to trade for the publick good. It is an affec⯑tation, indeed, not very common among merchants, and very few words need be employed in diſſuading them from it.

WHAT is the ſpecies of domeſtick induſtry which his capital can employ, and of which the produce is likely to be of the greateſt value, every individual, it is evident, can, in his local ſituation, judge much better than any ſtateſman or lawgiver can do for him. [36] The ſtateſman, who ſhould attempt to direct private people in what manner they ought to employ their capitals, would not only load himſelf with a moſt unneceſſary attention, but aſſume an authority which could ſafely be truſted, not only to no ſingle perſon, but to no council or ſenate whatever, and which would no where be ſo dangerous as in the hands of a man who had folly and pre⯑ſumption enough to fancy himſelf fit to exerciſe it.

TO give the monopoly of the home-market to the produce of domeſtick induſtry, in any particular art or manufacture, is in ſome meaſure to direct private people in what manner they ought to employ their capitals, and muſt, in almoſt all caſes, be either a uſeleſs or a hurtful regulation. If the produce of domeſtick can be brought there as cheap as that of foreign induſtry, the regulation is evidently uſeleſs. If it cannot, it muſt generally be hurtful. It is the maxim of every prudent maſter of a family, never to at⯑tempt to make at home what it will coſt him more to make than to buy. The taylor does not attempt to make his own ſhoes, but buys them of the ſhoemaker. The ſhoemaker does not attempt to make his own cloaths, but employs a taylor. The farmer at⯑tempts to make neither the one nor the other, but employs thoſe different artificers. All of them find it for their intereſt to employ their whole induſtry in a way in which they have ſome advantage over their neighbours, and to purchaſe with a part of its produce, or what is the ſame thing, with the price of a part of it, whatever elſe they have occaſion for.

WHAT is prudence in the conduct of every private family, can ſcarce be folly in that of a great kingdom. If a foreign coun⯑try can ſupply us with a commodity cheaper than we ourſelves can make it, better buy it of them with ſome part of the pro⯑duce of our own induſtry, employed in a way in which we have [37] ſome advantage. The general induſtry of the country, being always in proportion to the capital which employs it, will not thereby be diminiſhed, no more than that of the above-mentioned artificers; but only left to find out the way in which it can be employed with the greateſt advantage. It is certainly not em⯑ployed to the greateſt advantage, when it is thus directed to⯑wards an object which it can buy cheaper than it can make. The value of its annual produce is certainly more or leſs diminiſhed, when it is thus turned away from producing commodities evidently of more value than the commodity which it is directed to produce. According to the ſuppoſition, that commodity could be purchaſed from foreign countries cheaper than it can be made at home. It could, therefore, have been purchaſed with a part only of the commodities, or, what is the ſame thing, with a part only of the price of the commodities, which the induſtry employed by an equal capital, would have produced at home, had it been left to follow its natural courſe. The induſtry of the country, therefore, is thus turned away from a more, to a leſs advantageous employment, and the exchangeable value of its annual produce, inſtead of being increaſed, according to the intention of the lawgiver, muſt neceſ⯑ſarily be diminiſhed by every ſuch regulation.

BY means of ſuch regulations, indeed, a particular manufacture may ſometimes be acquired ſooner than it could have been otherwiſe, and after a certain time may be made at home as cheap or cheaper than in the foreign country. But though the induſtry of the ſociety may be thus carried with advantage into a particular channel ſooner than it could have been otherwiſe, it will by no means follow that the ſum total either of its induſtry or of its revenue can ever be augmented by any ſuch regulation. The induſtry of the ſociety can augment only in proportion as its capital augments, and its capital can augment only in proportion to what can be gradually ſaved out of its revenue. But the immediate effect of [38] every ſuch regulation is to diminiſh its revenue, and what diminiſhes its revenue, is certainly not very likely to augment its capital faſter than it would have augmented of its own accord, had both capital and induſtry been left to find out their natural employments.

THOUGH for want of ſuch regulations the ſociety ſhould never acquire the propoſed manufacture, it would not, upon that account, neceſſarily be the poorer in any one period of its duration. In every period of its duration its whole capital and induſtry might ſtill have been employed, though upon different objects, in the manner that was moſt advantageous at the time. In every period its revenue might have been the greateſt which its capital could afford, and both capital and revenue might have been augmenting with the greateſt poſſible rapidity.

THE natural advantages which one country has over another in producing particular commodities are ſometimes ſo great, that it is acknowledged by all the world to be in vain to ſtruggle with them, By means of glaſſes, hotbeds, and hotwalls, very good grapes can be raiſed in Scotland, and very good wine too can be made of them at about thirty times the expence for which at leaſt equally good can be brought from foreign countries. Would it be a reaſonable law to prohibit the importation of all foreign wines, merely to encourage the making of claret and burgundy in Scotland? But if there would be a manifeſt abſurdity in turning towards any em⯑ployment, thirty times more of the capital and induſtry of the country, than would be neceſſary to purchaſe from foreign countries an equal quantity of the commodities wanted, there muſt be an abſurdity, though not altogether ſo glaring, yet exactly of the ſame kind, in turning towards any ſuch employment a thirtieth, or even a three hundredth part more of either. Whether the ad⯑vantages which one country has over another, be natural or ac⯑quired, [39] is in this reſpect of no conſequence. As long as the one country has thoſe advantages, and the other wants them, it will always be more advantageous for the latter, rather to buy of the former than to make. It is an acquired advantage only, which one artificer has over his neighbour, who exerciſes another trade, and yet they both find it more advantageous to buy of one ano⯑ther, than to make what does not belong to their particular trades.

MERCHANTS and manufacturers are the people who derive the greateſt advantage from this monopoly of the home market. The prohibition of the importation of foreign cattle, and of ſalt proviſions, together with the high duties upon foreign corn, which in times of moderate plenty amount to a prohibition, are not near ſo advantageous to the graziers and farmers of Great Britain, as other regulations of the ſame kind are to its merchants and manu⯑facturers. Manufactures, thoſe of the finer kind eſpecially, are more eaſily tranſported from one country to another than corn or cattle. It is in the fetching and carrying manufactures, accord⯑ingly, that foreign trade is chiefly employed. In manufactures, a very ſmall advantage will enable foreigners to underſell our own workmen, even in the home market. It will require a very great one to enable them to do ſo in the rude produce of the ſoil. If the free importation of foreign manufactures was permitted, ſeveral of the home manufactures would probably ſuffer, and ſome of of them, perhaps, go to ruin altogether, and a conſiderable part of the ſtock and induſtry at preſent employed in them, would be forced to find out ſome other employment. But the freeſt im⯑portation of the rude produce of the ſoil could have no ſuch effect upon the agriculture of the country.

IF the importation of foreign cattle, for example, was made ever ſo free, ſo few could be imported, that the grazing trade of Great [40] Britain could be little affected by it. Live cattle are, perhaps, the only commodity of which the tranſportation is more expenſive by ſea than by land. By land they carry themſelves to market. By ſea, not only the cattle, but their food and their water too muſt be carried at no ſmall expence and inconveniency. The ſhort ſea between Ireland and Great Britain, indeed, renders the importation of Iriſh cattle more eaſy. But thought the free importation of them, which was lately permitted only for a limited time, were rendered perpetual, it could have no conſiderable effect upon the intereſt of the graziers of Great Britain. Thoſe parts of Great Britain which border upon the Iriſh ſea are all grazing countries. Iriſh cattle could never be imported for their uſe, but muſt be drove through thoſe very extenſive countries, at no ſmall expence and in⯑conveniency, before they could arrive at their proper market. Fat cattle could not be drove ſo far. Lean cattle, therefore, only could be imported, and ſuch importation could interfere, not with the intereſt of the feeding or fattening countries, to which by reducing the price of lean cattle, it would rather be advantageous, but with that of the breeding countries only. The ſmall number of Iriſh cattle imported ſince their importation was permitted, together with the good price at which lean cattle ſtill continue to ſell, ſeem to demonſtrate that even the breeding countries of Great Britain are never likely to be much affected by the free importation of Iriſh cattle. The common people of Ireland, indeed, are ſaid to have ſometimes oppoſed with violence the exportation of their cattle. But if the exporters had found any great advantage in continuing the trade, they could eaſily, when the law was on their ſide, have conquered this mobbiſh oppoſition.

FEEDING and fattening countries, beſides, muſt always be highly improved, whereas breeding countries are generally un⯑cultivated. The high price of lean cattle, by augmenting the value [41] of uncultivated land, is like a bounty againſt improvement. To any country which was highly improved throughout, it would be more advantageous to import its lean cattle than to breed them. The province of Holland, accordingly, is ſaid to follow this maxim at preſent. The mountains of Scotland, Wales, and Northumberland, indeed, are countries not capable of much im⯑provement, and ſeem deſtined by nature to be the breeding coun⯑tries of Great Britain. The freeſt importation of foreign cattle could have no other effect than to hinder thoſe breeding countries from taking advantage of the increaſing population and improve⯑ment of the reſt of the kingdom, from raiſing their price to an exorbitant height, and from laying a real tax upon all the more improved and cultivated parts of the country.

THE freeſt importation of ſalt proviſions, in the ſame manner, could have as little effect upon the intereſt of the graziers of Great Britain as that of live cattle. Salt proviſions are not only a very bulky commodity, but when compared with freſh meat, they are a commodity both of worſe quality, and as they coſt more labour and expence, of higher price. They could never, therefore, come into competition with the freſh meat, though they might with the ſalt proviſions of the country. They might be uſed for victualling ſhips for diſtant voyages, and ſuch like uſes, but could never make any conſiderable part of the food of the people. The ſmall quantity of ſalt proviſions imported from Ire⯑land ſince their importation was rendered free, is an experimental proof that our graziers have nothing to apprehend from it. It does not appear that the price of butcher's-meat has ever been ſenſibly affected by it.

EVEN the free importation of foreign corn could very little affect the intereſt of the farmers of Great Britain. Corn is a much more bulky commodity than butcher's-meat. A pound of [42] wheat at a penny is as dear as a pound of butcher's-meat at four⯑pence. The ſmall quantity of foreign corn imported even in times of the greateſt ſcarcity, may ſatisfy our farmers that they can have nothing to fear from the freeſt importation. The average quantity imported, one year with another, amounts only, according to the very well informed author of the tracts upon the corn trade, to twenty-three thouſand ſeven hundred and twenty-eight quarters of all ſorts of grain, and does not exceed the five hundredth and ſeventy-one part of the annual conſumption. But as the bounty upon corn occaſions a greater exportation in years of plenty, ſo it muſt of conſequence occaſion a greater importation in years of ſcarcity, than would otherwiſe take place. By means of it, the plenty of one year does not compenſate the ſcarcity of another, and as the average quantity exported is neceſſarily aug⯑mented by it, ſo muſt likewiſe, in the actual ſtate of tillage, the average quantity imported. If there was no bounty, as leſs corn would be exported, ſo it is probable that one year with another, leſs would be imported than at preſent. The corn merchants, the fetchers and carriers of corn, between Great Britain and foreign countries, would have much leſs employment, and might ſuffer conſiderably; but the country gentlemen and farmers could ſuffer very little. It is in the corn merchants accordingly, rather than in the country gentlemen and farmers, that I have obſerved the greateſt anxiety for the renewal and continuation of the bounty.

COUNTRY gentlemen and farmers are, to their great honour, of all people, the leaſt ſubject to the wretched ſpirit of monopoly. The undertaker of a great manufactory is ſometimes alarmed if another work of the ſame kind is eſtabliſhed within twenty miles of him. The Dutch undertaker of the woollen manufacture at Abbeville, ſtipulated that no work of the ſame kind ſhould be eſtabliſhed within thirty leagues of that city. Farmers and country [43] gentlemen, on the contrary, are generally diſpoſed rather to promote than to obſtruct the cultivation and improvement of their neigh⯑bours farms and eſtates. They have no ſecrets, ſuch as thoſe of the greater part of manufacturers, but are generally rather fond of communicating to their neighbours, and of extending as far as poſſible any new practice which they have found to be advan⯑tageous. Pius Queſtus, ſays old Cato, ſtabiliſſimuſque, minime⯑que invidioſus; minimeque male cogitantes ſunt, qui in eo ſtudio occupati ſunt. Country gentleman and farmers, diſperſed in dif⯑ferent parts of the country, cannot ſo eaſily combine as merchants and manufacturers, who being collected into towns, and accuſtomed to that excluſive corporation ſpirit which prevails in them, na⯑turally endeavour to obtain againſt all their countrymen, the ſame excluſive privilege which they generally poſſeſs againſt the inhabitants of their reſpective towns. They accordingly ſeem to have been the original inventors of thoſe reſtraints upon the im⯑portation of foreign goods, which ſecure to them the monopoly of the home market. It was probably in imitation of them, and to put themſelves upon a level with thoſe, who, they found were diſpoſed to oppreſs them, that the country gentlemen and farmers of Great Britain ſo far forgot the generoſity which is na⯑tural to their ſtation, as to demand the excluſive privilege of ſupplying their countrymen with corn and butcher's-meat. They did not perhaps take time to conſider, how much leſs their intereſt could be affected by the freedom of trade, than that of the people whoſe example they followed.

TO prohibit by a perpetual law the importation of foreign corn and cattle, is in reality to enact, that the population and induſtry of the country ſhall at no time exceed what the rude produce of its own ſoil can maintain.

[44] THERE ſeem, however, to be two caſes in which it will generally be advantageous to lay ſome burden upon foreign, for the encou⯑ragement of domeſtick induſtry.

THE firſt is when ſome particular ſort of induſtry is neceſſary for the defence of the country. The defence of Great Britain, for example, depends very much upon the number of its ſailors and ſhipping. The act of navigation, therefore, very properly endeavours to give the ſailors and ſhipping of Great Britain the monopoly of the trade of their own country, in ſome caſes, by abſolute prohibitions, and in others by heavy burdens upon the ſhipping of foreign countries. The following are the principal diſpoſitions of this act:

FIRST, all ſhips, of which the owners, maſters, and three⯑fourths of the mariners are not Britiſh ſubjects, are prohibited, upon pain of forfeiting ſhip and cargo, from trading to the Britiſh ſettlements and plantations, or from being employed in the coaſt⯑ing trade of Great Britain.

SECONDLY, a great variety of the moſt bulky articles of im⯑portation can be brought into Great Britain only, either in ſuch ſhips as are above deſcribed, or in ſhips of the country where thoſe goods are produced, and of which the owners, maſters, and three-fourths of the mariners are of that particular country; and when imported even in ſhips of this latter kind, they are ſubject to double aliens duty. If imported in ſhips of any other country, the penalty is forfeiture of ſhip and cargo. When this act was made, the Dutch were, what they ſtill are, the great carriers of Europe, and by this regulation they were entirely excluded from being the carriers to Great Britain, or from importing to us the goods of any other European country.

[45] THIRDLY, a great variety of the moſt bulky articles of im⯑portation are prohibited from being imported, even in Britiſh ſhips, from any country but that in which they are produced; under pain of forfeiting ſhip and cargo. This regulation too was probably intended againſt the Dutch. Holland was then, as now, the great emporium for all European goods, and by this regulation, Britiſh ſhips were hindered from loading in Holland the goods of any other European country.

FOURTHLY, ſalt fiſh of all kinds, whale-fins, whale-bone, oil and blubber, not caught by and cured on board Britiſh veſſels, when imported into Great Britain, are ſubjected to double aliens duty. The Dutch, as they are ſtill the principal, were then the only fiſhers in Europe that attempted to ſupply foreign nations with fiſh. By this regulation, a very heavy burden was laid upon their ſupplying Great Britain.

WHEN the act of navigation was made, though England and Holland were not actually at war, the moſt violent animoſity ſubſiſted between the two nations. It had begun during the government of the long parliament which firſt framed this act, and it broke out ſoon after in the Dutch wars during that of the Protector and of Charles the IId. It is not impoſſible, therefore, that ſome of the regulations of this famous act may have proceeded from national animoſity. They are as wiſe, however, as if they had all been dictated by the moſt deliberate wiſdom. National ani⯑moſity at that particular time aimed at the very ſame object which the moſt deliberate wiſdom would have recommended, the dimi⯑nution of the naval power of Holland, the only naval power which could endanger the ſecurity of England.

THE act of navigation is not favourable to foreign commerce, or to the growth of that opulence which can ariſe from it. The [46] intereſt of a nation in its commercial relations to foreign nations is, like that of a merchant with regard to the different people with whom he deals, to buy as cheap and to ſell as dear as poſſible. But it will be moſt likely to buy cheap, when by the moſt perfect free⯑dom of trade it encourages all nations to bring to it the goods which it has occaſion to purchaſe; and, for the ſame reaſon, it will be moſt likely to ſell dear, when its markets are thus filled with the greateſt number of buyers. The act of navigation, it is true, lays no burden upon foreign ſhips that come to export the produce of Britiſh induſtry. Even the antient aliens duty, which uſed to be paid upon all goods exported as well as imported, has, by ſeveral ſubſequent acts, been taken off from the greater part of the articles of exportation. But if foreigners, either by prohibitions or high duties, are hindered from coming to ſell, they cannot always afford to come to buy; becauſe coming without a cargo, they muſt loſe the freight from their own country to Great Britain. By diminiſhing the number of ſellers, therefore, we neceſſarily diminiſh that of buyers, and are thus likely not only to buy foreign goods dearer, but to ſell our own cheaper, than if there was a more perfect freedom of trade. As defence, however, is of much more importance than opulence, the act of navigation is, perhaps, the wiſeſt of all the commercial regulations of England.

THE ſecond caſe, in which it will generally be advantageous to lay ſome burden upon foreign for the encouragement of domeſtick induſtry, is, when ſome tax is impoſed at home upon the produce of the latter. In this caſe, it ſeems reaſonable that an equal tax ſhould be impoſed upon the like produce of the former. This would not give the monopoly of the home market to domeſtick induſtry, nor turn towards a particular employment a greater ſhare of the ſtock and labour of the country, than what would naturally go to it. It would only hinder any part of what would naturally [47] go to it from being turned away by the tax, into a leſs natural direction, and would leave the competition between foreign and domeſtick induſtry, after the tax, as nearly as poſſible upon the ſame footing as before it. In Great Britain, when any ſuch tax is laid upon the produce of domeſtick induſtry, it is uſual at the ſame time, in order to ſtop the clamorous complaints of our merchants and manufacturers, that they will be underſold at home, to lay a much heavier duty upon the importation of all foreign goods of the ſame kind.

THIS ſecond limitation of the freedom of trade according to ſome people ſhould, upon ſome occaſions, be extended much further than to the preciſe foreign commodities which could come into competition with thoſe which had been taxed at home. When the neceſſaries of life have been taxed in any country, it becomes proper, they pretend, to tax not only the like neceſſaries of life imported from other countries, but all ſorts of foreign goods which can come into competition with any thing that is the produce of domeſtick induſtry. Subſiſtence, they ſay, becomes neceſſarily dearer in conſequence of ſuch taxes; and the price of labour muſt always riſe with the price of the labourers ſubſiſtence. Every com⯑modity, therefore, which is the produce of domeſtick induſtry, though not immediately taxed itſelf, becomes dearer in conſequence of ſuch taxes, becauſe the labour which produces it becomes ſo. Such taxes, therefore, are really equivalent, they ſay, to a tax upon every particular commodity produced at home. In order to put domeſtick upon the ſame footing with foreign induſtry, therefore, it becomes neceſſary, they think, to lay ſome duty upon every foreign commodity, equal to this enhancement of the price of the home commodities with which it can come into com⯑petition.

[48] WHETHER taxes upon the neceſſaries of life, ſuch as thoſe in Great Britain upon malt, beer, ſoap, ſalt, leather, candles, &c. neceſſarily raiſe the price of labour, and conſequently that of all other commodities, I ſhall conſider hereafter, when I come to treat of taxes. Suppoſing, however, in the mean time, that they have this effect, and they have it undoubtedly, this general enhancement of the price of all commodities, in conſequence of that of labour, is a caſe which differs in the two following reſpects from that of a particular commodity, of which the price was enhanced by a particular tax immediately impoſed upon it.

FIRST, it might always be known with great exactneſs how far the price of ſuch a commodity could be enhanced by ſuch a tax: but how far the general enhancement of the price of labour might affect that of every different commodity, about which labour was employed, could never be known with any tolerable exactneſs. It would be impoſſible, therefore, to proportion with any tolerable exactneſs the tax upon every foreign to this enhancement of the price of every home commodity.

SECONDLY, taxes upon the neceſſaries of life have nearly the ſame effect upon the circumſtances of the people as a poor ſoil and a bad climate. Proviſions are thereby rendered dearer in the ſame manner as if it required extraordinary labour and expence to raiſe them. As in the natural ſcarcity ariſing from ſoil and cli⯑mate, it would be abſurd to direct the people in what manner they ought to employ their capitals and induſtry, ſo it is likewiſe in the artificial ſcarcity ariſing from ſuch taxes. To be left to accommo⯑date, as well as they could, their induſtry to their ſituation, and to find out thoſe employments in which, notwithſtanding their un⯑favourable circumſtances, they might have ſome advantage either in [49] the home, or in the foreign market, is what in both caſes, would evidently be moſt for their advantage. To lay a new tax upon them, becauſe they are already overburdened with taxes, and becauſe they already pay too dear for the neceſſaries of life, to make them likewiſe pay too dear for the greater part of other commodities, is certainly a moſt abſurd way of making amends.

SUCH taxes, when they have grown up to a certain height, are a curſe equal to the barrenneſs of the earth and the inclemency of the heavens; and yet it is in the richeſt and moſt induſtrious coun⯑tries that they have been moſt generally impoſed. No other coun⯑tries could ſupport ſo great a diſorder. As the ſtrongeſt bodies only can live and enjoy health, under an unwholeſome regimen; ſo the nations only, that in every ſort of induſtry have the greateſt natural and acquired advantages, can ſubſiſt and proſper under ſuch taxes. Holland is the country in Europe in which they abound moſt, and which from peculiar circumſtances continues to proſper, not by means of them, as has been moſt abſurdly ſuppoſed, but in ſpite of them.

As there are two caſes in which it will generally be advantage⯑ous to lay ſome burden upon foreign, for the encouragement of domeſtick induſtry; ſo there are two others in which it may ſome⯑times be a matter of deliberation; in the one, how far it is proper to continue the free importation of certain foreign goods; and in the other, how far or in what manner it may be proper to reſtore that free importation after it has been for ſome time interrupted.

THE caſe in which it may ſometimes be a matter of deliberation how far it is proper to continue the free importation of certain foreign goods, is, when ſome foreign nation reſtrains by high duties or prohibitions the importation of ſomeof our manufactures into [50] their country. Revenge in this caſe naturally dictates retaliation, and that we ſhould impoſe the like duties and prohibitions upon the importation of ſome or all of their manufactures into ours. Nations, accordingly, ſeldom fail to retaliate in this manner. The French have been particularly forward to favour their own manufactures by reſtraining the importation of ſuch foreign goods as could come into competition with them. In this conſiſted a great part of the policy of Mr. Colbert, who, notwithſtanding his great abilities, ſeems in this caſe to have been impoſed upon by the ſophiſtry of merchants and manufacturers, who are always demand⯑ing a monopoly againſt their countrymen. It is at preſent the opinion of the moſt intelligent men in France that his operations of this kind have not been beneficial to his country. That miniſter by the tarif of 1667, impoſed very high duties upon a great num⯑ber of foreign manufactures. Upon his refuſing to moderate them in favour of the Dutch, they in 1671 prohibited the importation of the wines, brandies, and manufactures of France. The war of 1672 ſeems to have been in part occaſioned by this commercial diſpute. The peace of Nimeguen put an end to it in 1678, by moderating ſome of thoſe duties in favour of the Dutch, who in conſequence took off their prohibition. It was about the ſame time that the French and Engliſh began mutually to oppreſs each other's induſtry, by the like duties and prohibitions, of which the French, however, ſeem to have ſet the firſt example. The ſpirit of hoſ⯑tility which has ſubſiſted between the two nations ever ſince, has hitherto hindered them from being moderated on either ſide. In 1697 the Engliſh prohibited the importation of bonelace, the manufacture of Flanders. The government of that country, at that time under the dominion of Spain, prohibited in return the importation of Engliſh woollens. In 1700, the prohibition of importing bonelace into England, was taken off upon condition that the importation of Engliſh woollens into Flanders ſhould be put on the ſame footing as before.

[51] THERE may be good policy in retaliations of this kind, when there is a probability that they will procure the repeal of the high duties or prohibitions complained of. The recovery of a great foreign market will generally more than compenſate the tranſitory inconveniency of paying dearer during a ſhort time for ſome ſorts of goods. To judge whether ſuch retaliations are likely to produce ſuch an effect, does not, perhaps, belong ſo much to the ſcience of a legiſlator, whoſe deliberations ought to be governed by general principles which are always the ſame, as to the ſkill of that in⯑ſidious and crafty animal, vulgarly called a ſtateſman or politician, whoſe councils are directed by the momentary fluctuations of affairs. When there is no probability that any ſuch repeal can be procured, it ſeems a bad method of compenſating the injury done to certain claſſes of our people, to do another injury ourſelves both to thoſe claſſes and to almoſt all the other claſſes of them. When our neighbours prohibit ſome manufacture of ours, we generally pro⯑hibit, not only the ſame, for that alone would ſeldom affect them conſiderably, but ſome other manufacture of theirs. This may no doubt give encouragement to ſome particular claſs of workmen among ourſelves, and by excluding ſome of their rivals, may en⯑able them to raiſe their price in the home market. Thoſe work⯑men, however, who ſuffered by our neighbours prohibition will not be benefited by ours. On the contrary, they, and almoſt all the other claſſes of our citizens will thereby be obliged to pay dearer than before for certain goods. Every ſuch law, therefore, impoſes a real tax upon the whole country, not in favour of that particular claſs of workmen who were injured by our neighbours prohibition, but of ſome other claſs.

THE caſe in which it may ſometimes be a matter of deliberation how far or in what manner it is proper to reſtore the free impor⯑tation of foreign goods, after it has been for ſome time interrupted, [52] is, when particular manufactures, by means of high duties or prohibitions upon all foreign goods which can come into compe⯑tition with them, have been ſo far extended as to employ a great multitude of hands. Humanity may in this caſe require that the freedom of trade ſhould be reſtored only by ſlow gradations, and with a good deal of reſerve and circumſpection. Were thoſe high duties and prohibitions taken away all at once, cheaper foreign goods of the ſame kind might be poured ſo faſt into the home market, as to deprive all at once many thouſands of our people of their or⯑dinary employment and means of ſubſiſtence. The diſorder which this would occaſion might no doubt be very conſiderable. It would in all probability, however, be much leſs than is commonly ima⯑gined, for the two following reaſons:

FIRST, all thoſe manufactures, of which any part is commonly exported to other European countries without a bounty, could be very little affected by the freeſt importation of foreign goods. Such manufactures muſt be ſold as cheap abroad as any other foreign goods of the ſame quality and kind, and conſequently muſt be ſold cheaper at home. They would ſtill, therefore, keep poſſeſſion of the home market, and though a capricious man of faſhion might ſometimes prefer foreign wares, merely becauſe they were foreign, to cheaper and better goods of the ſame kind that were made at home, this folly could from the nature of things extend to ſo few, that it could make no ſenſible impreſſion upon the general employment of the people. But a great part of all the different branches of our woollen manufacture, of our tanned leather, and of our hard⯑ware, are annually exported to other European countries without any bounty, and theſe are the manufactures which employ the greateſt number of hands. The ſilk, perhaps, is the manufacture which would ſuffer the moſt by this freedom of trade, and after it the linen, though the latter much leſs than the former.

[53] SECONDLY, though a great number of people ſhould, by thus reſtoring the freedom of trade, be thrown all at once out of their ordinary employment and common method of ſubſiſtence, it would by no means follow that they would thereby be deprived either of employment or ſubſiſtence. By the reduction of the army and navy at the end of the late war more than a hundred thouſand ſoldiers and ſeamen, a number equal to what is employed in the greateſt manu⯑factures, were all at once thrown out of their ordinary employ⯑ment; but, though they no doubt ſuffered ſome inconveniency, they were not thereby deprived of all employment and ſubſiſtence. The greater part of the ſeamen, it is probable, gradually betook themſelves to the merchants ſervice as they could find occaſion, and in the mean time both they and the ſoldiers were abſorbed in the great maſs of the people, and employed in a great variety of occupations. Not only no great convulſion, but no ſenſible diſ⯑order aroſe from ſo great a change in the ſituation of more than a hundred thouſand men, all accuſtomed to the uſe of arms, and many of them to rapine and plunder. The number of vagrants was ſcarce anywhere ſenſibly increaſed by it, even the wages of labour were not reduced by it in any occupation, ſo far as I have been able to learn, except in that of ſeamen in the merchant ſer⯑vice. But if we compare together the habits of a ſoldier and of any ſort of manufacturer, we ſhall find that thoſe of the latter do not tend ſo much to diſqualify him from being employed in a new trade, as thoſe of the former from being employed in any. The manufacturer has always been accuſtomed to look for his ſubſiſtence from his labour only: the ſoldier to expect it from his pay. Appli⯑cation and induſtry have been familiar to the one; idleneſs and diſ⯑ſipation to the other. But it is ſurely much eaſier to change the direction of induſtry from one ſort of labour to another, than to turn idleneſs and diſſipation to any. To the greater part of manufactures beſides, it has already been obſerved, there are other [54] collateral manufactures of ſo ſimilar a nature, that a workman can eaſily transfer his induſtry from one of them to another. The greater part of ſuch workmen too are occaſionally employed in country labour. The ſtock which employed them in a particular manufacture before, will ſtill remain in the country to employ an equal number of people in ſome other way. The capital of the country remaining the ſame, the demand for labour will likewiſe be the ſame, or very nearly the ſame, though it may be exerted in different places and for different occupations. Soldiers and ſea⯑men, indeed, when diſcharged from the kings ſervice, are at liberty to exerciſe any trade, within any town or place of Great Britain or Ireland. Let the ſame natural liberty of exerciſing what ſpecies of induſtry they pleaſe be reſtored to all his majeſty's ſubjects, in the ſame manner as to ſoldiers and ſeamen; that is, break down the excluſive privileges of corporations, and repeal the ſtatute of apprenticeſhip, both which are real encroachments upon natural liberty, and add to theſe the repeal of the law of ſettlements, ſo that a poor workman, when thrown out of employment either in one trade or in one place, may ſeek for it in another trade or in another place, without the fear either of a proſecution or of a removal, and neither the publick nor the individuals will ſuffer much more from the occaſional diſbanding ſome particular claſſes of manufacturers, than from that of ſoldiers. Our manufacturers have no doubt great merit with their country, but they cannot have more than thoſe who defend it with their blood, nor deſerve to be treated with more delicacy.

To expect, indeed, that the freedom of trade ſhould ever be entirely reſtored in Great Britain, is as abſurd as to expect that an Oceana or Utopea ſhould ever be eſtabliſhed in it. Not only the prejudices of the publick, but what is much more unconquerable, the private intereſts of many individuals irreſiſtably oppoſe it. Were the [55] officers of the army to oppoſe with the ſame zeal and unanimity any reduction in the number of forces, with which maſter manu⯑facturers ſet themſelves againſt every law that is likely to increaſe the number of their rivals in the home market, were the former to animate their ſoldiers in the ſame manner as the latter enflame their workmen to attack with violence and outrage the propoſers of any ſuch regulation, to attempt to reduce the army would be as dangerous as it has now become to attempt to diminiſh in any reſpect the monopoly which our manufacturers have obtained againſt us. This monopoly has ſo much increaſed the number of ſome particular tribes of them, that, like an overgrown ſtand⯑ing army, they have become formidable to the government, and upon many occaſions intimidate the legiſlature. The member of parliament who ſupports every propoſal for ſtrongthening this mo⯑nopoly, is ſure to acquire not only the reputation of underſtanding trade, but great popularity and influence with an order of men whoſe numbers and wealth render them of great importance. If he oppoſes them, on the contrary, and ſtill more if he has authority enough to be able to thwart them, neither the moſt acknowledged probity, nor the higheſt rank, nor the greateſt publick ſervices can protect him from the moſt infamous abuſe and detraction, from perſonal inſults, nor ſometimes from real danger, ariſing from the inſolent outrage of furious and diſappointed monopoliſts.

THE undertaker of a great manufacture who, by the home markets being ſuddenly laid open to the competition of foreigners, ſhould be obliged to abandon his trade, would no doubt ſuffer very conſiderably. That part of his capital which had uſually been employed in purchaſing materials and in paying his workmen, might, without much difficulty, perhaps, find another employment. But that part of it which was fixed in workhouſes, and in the in⯑ſtruments of trade, could ſcarce be diſpoſed of without conſiderable [56] loſs. The equitable regard, therefore, to his intereſt requires that changes of this kind ſhould never be introduced ſuddenly, but ſlowly, gradually, and after a very long warning. The legiſlature were it poſſible that its deliberations could be always directed, not by the clamorous importunity of partial intereſts, but by an extenſive view of the general good, ought upon this very account perhaps, to be particularly careful neither to eſtabliſh any new monopolies of this kind, nor to extend further thoſe which are already eſtabliſhed. Every ſuch regulation introduces ſome degree of real diſorder into the conſtitution of the ſtate, which it will be difficult afterwards to cure without occaſioning another diſ⯑order.

HOW far it may be proper to impoſe taxes upon the importation of foreign goods, in order, not to prevent their importation, but to raiſe a revenue for government, I ſhall conſider hereafter when I come to treat of taxes. Taxes impoſed with a view to prevent, or even to diminiſh importation, are evidently as deſtructive of the revenue of the cuſtoms as of the freedom of trade.

CHAP. III. Of the extraordinary Reſtraints upon the Importation of Goods of almoſt all Kinds, from thoſe Countries with which the Balance is ſuppoſed to be diſadvantageous.

TO lay extraordinary reſtraints upon the importation of goods of almoſt all kinds, from thoſe particular countries with which the balance of trade is ſuppoſed to be diſadvantageous, is the ſecond expedient by which the commercial ſyſtem propoſes to in⯑creaſe the quantity of gold and ſilver. Thus in Great Britain higher duties are laid upon the wines of France than upon thoſe of Portugal. German linen may be imported upon paying certain duties; but French linen is altogether prohibited. The principles which I have been examining, took their origin from private intereſt and the ſpirit of monopoly: thoſe which I am going to examine from national prejudice and animoſity. They are, accordingly, as might well be expected, ſtill more unreaſonable. They are ſo, even upon the principles of the commercial ſyſtem.

FIRST, though it were certain that in the caſe of a free trade between France and England, for example, the balance would be in favour of France, it would by no means follow that ſuch a trade would be diſadvantageous to England, or that the general balance of its whole trade would thereby be turned more againſt it. If the wines of France are better and cheaper than thoſe of Portugal, or its linens than thoſe of Germany, it would be more advantageous for Great Britain to purchaſe both the wine and the foreign linen which it had occaſion for of France, than of Portugal and Ger⯑many. Though the value of the annual importations from France would thereby be greatly augmented, the value of the whole annual importations would be diminiſhed, in proportion as the French [58] goods of the ſame quality were cheaper than thoſe of the other two countries. This would be the caſe, even upon the ſuppoſition that the whole French goods imported were to be conſumed in Great Britain.

BUT, ſecondly, a great part of them might be re-exported to other countries, where, being ſold with profit, they might bring back a return equal in value, perhaps, to the prime coſt of the whole French goods imported. What has frequently been ſaid of the Eaſt India trade might poſſibly be true of the French; that though the greater part of Eaſt India goods were bought with gold and ſilver, the re-exportation of a part of them to other countries, brought back more gold and ſilver to that which carried on the trade than the prime coſt of the whole amounted to. One of the moſt important branches of the Dutch trade, at preſent, conſiſts in the carriage of French goods to other European countries. A great part even of the French wine drank in Great Britain is clandeſtinely imported from Holland and Zealand. If there was either a free trade between France and England, or if French goods could be imported upon paying only the ſame duties as thoſe of other Euro⯑pean nations, to be drawn back upon exportation, England might have ſome ſhare of a trade which is found ſo advantageous to Holland.

THIRDLY, and laſtly, there is no certain criterion by which we can determine on which ſide what is called the balance between any two countries lies, or which of them exports to the greateſt value. National prejudice and animoſity, prompted always by the private intereſt of particular traders, are the principles which generally di⯑rect our judgement upon all queſtions concerning it. There are two criterions, however, which have frequently been appealed to upon ſuch occaſions, the cuſtom-houſe books and the courſe of ex⯑change. [59] The cuſtom-houſe books, I think, it is now generally ac⯑knowledged, are a very uncertain criterion, on account of the inac⯑curacy of the valuation at which the greater part of goods are rated in them. The courſe of exchange, at leaſt, as it has hitherto been eſtimated, is, perhaps, almoſt equally ſo.

WHEN the exchange between two places, ſuch as London and Paris, is at par, it is ſaid to be a ſign that the debts due from Lon⯑don to Paris are compenſated by thoſe due from Paris to London. On the contrary, when a premium is paid at London for a bill upon Paris, it is ſaid to be a ſign that the debts due from London to Paris are not compenſated by thoſe due from Paris to London, but that a balance in money muſt be ſent out from the latter place; for the riſk, trouble, and expence of exporting which, the pre⯑mium is both demanded and given. But the ordinary ſtate of debt and credit between thoſe two cities muſt neceſſarily be regulated, it is ſaid, by the ordinary courſe of their dealings with one another. When neither of them imports from the other to a greater amount than it exports to it, the debts and credits of each may compenſate one another. But when one of them imports from the other to a greater value than it exports to it, the former neceſſarily becomes indebted to the latter in a greater ſum than the latter becomes in⯑debted to it: the debts and credits of each do not compenſate one another, and money muſt be ſent out from that place of which the debts over-balance the credits. The common courſe of ex⯑change, therefore, being an indication of the ordinary ſtate of debt and credit between two places, muſt likewiſe be an indication of the ordinary courſe of their exports and imports, as theſe neceſſa⯑rily regulate that ſtate.

BUT though this doctrine, of which ſome part is, perhaps, not a little doubtful, were ſuppoſed ever ſo certain, the manner in which the par of exchange has hitherto been computed, renders uncer⯑tain every concluſion that has ever yet been drawn from it.

[60] WHEN for a ſum of money paid in England, containing, accord⯑ing to the ſtandard of the Engliſh mint, a certain number of ounces of pure ſilver, you receive a bill for a ſum of money to be paid in France, containing, according to the ſtandard of the French mint, an equal number of ounces of pure ſilver, exchange is ſaid to be at par between England and France. When you pay more, you are ſuppoſed to give a premium, and exchange is ſaid to be againſt England, and in favour of France. When you pay leſs, you are ſuppoſed to get a premium, and exchange is ſaid to be againſt France, and in favour of England.

BUT, firſt we cannot always judge of the value of the current money of different countries by the ſtandards of their reſpective mints. In ſome it is more, in others it is leſs worn, clipt, and otherwiſe degenerated from that ſtandard. But the value of the current coin of every country, compared with that of any other country, is in proportion, not to the quantity of pure ſilver which it ought to contain, but to that which it actually does contain. Before the reformation of the ſilver coin in king William's time, exchange between England and Holland, computed, in the uſual manner, according to the ſtandards of their reſpective mints, was five and twenty per cent. againſt England. But the value of the cur⯑rent coin of England, as we learn from Mr. Lowndes, was at that time rather more than five and twenty per cent. below its ſtandard value. The real exchange, therefore, may even at that time have been in favour of England, notwithſtanding the computed exchange was ſo much againſt it; a ſmaller number of ounces of pure ſilver, actually paid in England, may have purchaſed a bill for a greater number of ounces of pure ſilver to be paid in Holland, and the man who was ſuppoſed to give, may in reality have got the premium. The French coin was, before the late reformation of the Engliſh gold coin, much leſs worn than the Engliſh, and was, perhaps, two or [61] three per cent. nearer its ſtandard. If the computed exchange with France, therefore, was not more than two or three per cent. againſt England, the real exchange might have been in its favour. Since the reformation of the gold coin, the exchange has been con⯑ſtantly in favour of England, and againſt France.

SECONDLY, in ſome countries, the expence of coinage is defrayed by the government, in others, it is defrayed by the private people who carry their bullion to the mint, and the government even de⯑rives ſome revenue from the coinage. In England, it is defrayed by the government, and if you carry a pound weight of ſtandard ſilver to the mint, you get back ſixty-two ſhillings, containing a pound weight of the like ſtandard ſilver. In France, a duty of eight per cent. is deducted for the coinage, which not only defrays the ex⯑pence of it, but affords a ſmall revenue to the government. In England, as the coinage coſts nothing, the current coin can never be much more valuable than the quantity of bullion which it actually contains. In France, the workmanſhip as you pay for it, adds to the value, in the ſame manner as to that of wrought plate. A ſum of French money, therefore, containing a certain weight of pure ſilver, is more valuable than a Sum of Engliſh money contain⯑ing an equal weight of pure ſilver, and muſt require more bullion, or other commodities to purchaſe it. Though the current coin of the two countries, therefore, were equally near the ſtandards of their reſpective mints, a ſum of Engliſh money could not well pur⯑chaſe a ſum of French money, containing an equal number of ounces of pure ſilver, nor conſequently a bill upon France for ſuch a ſum. If for ſuch a bill no more additional money was paid than what was ſufficient to compenſate the expence of the French coin⯑age, the real exchange might be at par between the two countries, their debts and credits might mutually compenſate one another, while the computed exchange was conſiderably in favour of France. [62] If leſs than this was paid, the real exchange might be in favour of England, while the computed was in favour of France.

THIRDLY, and laſtly, in ſome places, as at Amſterdam, Ham⯑burgh, Venice, &c. foreign bills of exchange are paid in what they call bank money; while in others, as at London, Liſbon, Antwerp, Leghorn, &c. they are paid in the common currency of the coun⯑try. What is called bank money is always of more value than the ſame nominal ſum of common currency. A thouſand guilders in the bank of Amſterdam, for example, are of more value than a thouſand guilders of Amſterdam currency. The difference between them is called the agio of the bank, which, at Amſterdam, is gene⯑rally about five per cent. Suppoſing the current money of two countries equally near to the ſtandard of their reſpective mints, and that the one pays foreign bills in this common currency, while the other pays them in bank money, it is evident that the computed ex⯑change may be in favour of that which pays in bank money, though the real exchange ſhould be in favour of that which pays in cur⯑rent money; for the ſame reaſon that the computed exchange may be in favour of that which pays in better money, or in money nearer to its own ſtandard, though the real exchange ſhould be in favour of that which pays in worſe. The computed exchange, before the late reformation of the gold coin, was generally againſt London with Amſterdam, Hamburgh, Venice, and, I believe, with all other places which pay in what is called bank money. It will by no means follow, however, that the real exchange was againſt it. Since the reformation of the gold coin, it has been in favour of London even with thoſe places. The computed exchange has gene⯑rally been in favour of London with Liſbon, Antwerp, Leghorn, and, if you except France, I believe, with moſt other parts of Europe that pay in common currency; and it is not improbable that the real exchange was ſo too.

THOUGH the computed exchange between any two places were in every reſpect the ſame with the real, it would not always fol⯑low that what is called the balance of trade was in favour of that place which had the ordinary courſe of exchange in its favour. The ordinary courſe of exchange might, indeed, in this caſe, be a tolerable indication of the ordinary ſtate of debt and credit between them, and ſhow which of the two countries uſually had occaſion to ſend out money to the other. But the ordinary ſtate of debt and credit between any two places is not always entirely regu⯑lated by the ordinary courſe of their dealings with one another, but is influenced by that of the dealings of both with many other countries. If it was uſual, for example, for the merchants of England to pay the goods which they buy from Hamburgh, Dant⯑zick, Riga, &c. by bills upon Holland, the ordinary ſtate of debt and credit between England and Holland would not be entirely regulated by the ordinary courſe of the dealings of thoſe two coun⯑tries with one another, but would be influenced by that of Eng⯑land with thoſe other places. England might, in this caſe, be annually obliged to ſend out money to Holland, though its annual [76] exports to that country exceeded the annual value of its imports from it, and though what is called the balance of trade was very much in favour of England.

HITHERTO I have been endeavouring to ſhew, even upon the principles of the commercial ſyſtem, how unneceſary it is to lay extraordinary reſtraints upon the importation of goods from thoſe countries with which the balance of trade is ſuppoſed to be diſad⯑vantageous.

NOTHING, however, can be more abſurd than this whole doc⯑trine of the balance of trade, upon which, not only theſe reſtraints, but almoſt all the other regulations of commerce are founded. When two places trade with one another, this doctrine ſuppoſes that, if the balance be even, neither of them either loſes or gains; but if it leans in any degree to one ſide, that one of them loſes, and the other gains in proportion to its declenſion from the exact equi⯑librium. Both ſuppoſitions are falſe. A trade which is forced by means of bounties and monopolies, may be, and commonly is diſ⯑advantageous to the country in whoſe favour it is meant to be eſta⯑bliſhed, as I ſhall endeavour to ſhew hereafter. But that trade which, without force or conſtraint, is naturally and regularly car⯑ried on between any two places, is always advantageous, though not always equally ſo, to both.

BY advantage or gain, I underſtand, not the increaſe of the quantity of gold and ſilver, but that of the exchangeable value of the annual produce of the land and labour of the country, or the increaſe of the annual revenue of its inhabitants.

IF the balance be even, and if the trade between the two places conſiſt altogether in the exchange of their native commodities, they will, upon moſt occaſions, not only both gain, but they will gain equally, or very near equally: each will in this caſe afford a market for a part of the ſurplus produce of the other: each will [77] replace a capital which had been employed in raiſing this part of the ſurplus produce of the other, and which had been diſtributed among, and given revenue and maintenance to a certain number of its inhabitants. Some part of the inhabitants of each there⯑fore will indirectly derive their revenue and maintenance from the other. As the commodities exchanged too are ſuppoſed to be of equal value, ſo the two capitals employed in the trade will, upon moſt occaſions, be equal, or very nearly equal; and both being employed in raiſing the native commodities of the two countries, the revenue and maintenance which their diſtribution will afford to the inhabitants of each will be equal, or very nearly equal. This revenue and maintenance, thus mutually afforded, will be greater or ſmaller in proportion to the extent of their dealings. If theſe ſhould annually amount to an hundred thouſand pounds, for example, or to a million on each ſide, each of them would afford an annual revenue, in the one caſe, of an hundred thouſand pounds, in the other, of a million, to the inhabitants of the other.

IF their trade ſhould be of ſuch a nature that one of them ex⯑ported to the other nothing but native commodities, while the returns of that other conſiſted altogether in foreign goods; the balance, in this caſe, would ſtill be ſuppoſed even, commodities being paid for with commodities. They would, in this caſe too, both gain, but they would not gain equally; and the inhabitants of the country which exported nothing but native commodities would derive the greateſt revenue from the trade. If England, for exam⯑ple, ſhould import from France nothing but the native commodi⯑ties of that country, and, not having ſuch commodities of its own as were in demand there, ſhould annually repay them by ſending thither a large quantity of foreign goods, tobacco, we ſhall ſuppoſe, and Eaſt India goods; this trade, though it would give ſome revenue to the inhabitants of both countries, would give [78] more to thoſe of France than to thoſe of England. The whole French capital annually employed in it would annually be diſtri⯑buted among the people of France. But that part of the Engliſh capital only which was employed in producing the Engliſh commo⯑dities with which thoſe foreign goods were purchaſed, would be annually diſtributed among the people of England. The greater part of it would replace the capitals which had been employed in Virginia, Indoſtan, and China, and which had given revenue and maintenance to the inhabitants of thoſe diſtant countries. If the capitals were equal, or nearly equal, therefore, this employment of the French capital would augment much more the revenue of the people of France, than that of the Engliſh capital would the revenue of the people of England. France would in this caſe carry on a direct foreign trade of conſumption with England; whereas England would carry on a round-about trade of the ſame kind with France. The different effects of a capital employed in the direct, and of one employed in the round-about foreign trade of conſumption, have already been fully explained.

THERE is not, probably, between any two countries, a trade which conſiſts altogether in the exchange either of native commo⯑dities on both ſides, or of native commodities on one ſide and of foreign goods on the other. Almoſt all countries exchange with one another partly native and partly foreign goods. That coun⯑try, however, in whoſe cargoes there is the greateſt proportion of native, and the leaſt of foreign goods, will always be the prin⯑cipal gainer. If it was not with tobacco and Eaſt India goods, but with gold and ſilver, that England paid for the commodities annually imported from France, the balance, in this caſe, would be ſuppoſed uneven, commodities not being paid for with commo⯑dities, but with gold and ſilver. The trade, however, would, in this caſe, as in the foregoing, give ſome revenue to the inhabitants [79] of both countries, but more to thoſe of France than to thoſe of England. It would give ſome revenue to thoſe of England. The capital which had been employed in producing the Engliſh goods that purchaſed this gold and ſilver, the capital which had been diſtributed among, and given revenue to certain inhabitants of England, would thereby be replaced, and enabled to continue that employment. The whole capital of England would no more be diminiſhed by this exportation of gold and ſilver, than by the expor⯑tation of an equal value of any other goods. On the contrary, it would, in moſt caſes, be augmented. No goods are ſent abroad but thoſe for which the demand is ſuppoſed to be greater abroad than at home, and of which the returns conſequently, it is expect⯑ed, will be of more value at home than the commodities export⯑ed. If the tobacco which, in England, is worth only a hundred thouſand pounds, when ſent to France will purchaſe wine which is, in England, worth a hundred and ten thouſand pounds, the exchange will augment the capital of England by ten thouſand pounds. If a hundred thouſand pounds of Engliſh gold, in the ſame manner, purchaſe French wine which, in England, is worth a hundred and ten thouſand, this exchange will equally augment the capital of England by ten thouſand pounds. As a merchant who has a hundred and ten thouſand pounds worth of wine in his cellar, is a richer man than he who has only a hundred thouſand pounds worth of tobacco in his warehouſe, ſo is he likewiſe a richer man than he who has only a hundred thouſand pounds worth of gold in his coffers. He can put into motion a greater quantity of induſtry, and give revenue, maintenance, and employ⯑ment, to a greater number of people than either of the other two. But the capital of the country is equal to the capitals of all its different inhabitants, and the quantity of induſtry which can be annually maintained in it, is equal to what all thoſe different capi⯑tals can maintain. Both the capital of the country, therefore, [80] and the quantity of induſtry which can be annually maintained in it, muſt generally be augmented by this exchange. It would, indeed, be more advantageous for England that it could purchaſe the wines of France with its own hardware and broad-cloth, than with either the tobacco of Virginia, or the gold and ſilver of Brazil and Peru. A direct foreign trade of conſumption is always more advantageous than a round-about one. But a round-about foreign trade of conſumption which is carried on with gold and ſilver, does not ſeem to be leſs advantageous than any other equally round⯑about one. Neither is a country which has no mines more likely to be exhauſted of gold and ſilver by this annual exportation of thoſe metals, than one which does not grow tobacco by the like annual exportation of that plant. As a country which has where⯑withal to buy tobacco will never be long in want of it, ſo nei⯑ther will one be long in want of gold and ſilver which has where⯑withal to purchaſe thoſe metals.

IT is a loſing trade, it is ſaid, which a workman carries on with the alehouſe; and the trade which a manufacturing nation would naturally carry on with a wine country, may be conſidered as a trade of the ſame nature. I anſwer, that the trade with the alehouſe is not neceſſarily a loſing trade. In its own nature it is juſt as advantageous as any other, though, perhaps, ſomewhat more liable to be abuſed. The employment of a brewer, and even that of a retailer of fermented liquors, are as neceſſary diviſions of labour as any other. It will generally be more advantageous for a workman to buy of the brewer the quantity he has occaſion for than to make it himſelf, and if he is a poor workman, it will ge⯑nerally be more advantageous for him to buy it by little and little of the retailer, than a large quantity of the brewer. He may no doubt buy too much of either, as he may of any other dealers in his neighbourhood, of the butcher, if he is a glutton, or of the draper, if he affects to be a beau among his companions. It is [81] advantageous to the great body of workmen notwithſtanding, that all theſe trades ſhould be free, though this freedom may be abuſed in all of them, and is more likely to be ſo, perhaps, in ſome than in others. Though individuals, beſides, may ſometimes ruin their fortunes by an exceſſive conſumption of fermented liquors, there ſeems to be no riſk that a nation ſhould do ſo. Though in every country there are many people who ſpend upon ſuch liquors more than they can afford, there are always many more who ſpend leſs. It deſerves to be remarked too that, if we conſult experience, the cheapneſs of wine ſeems to be a cauſe, not of drunkenneſs, but of ſobriety. The inhabitants of the wine countries are in ge⯑neral the ſobereſt people in Europe; witneſs the Spaniards, the Italians, and the inhabitants of the ſouthern provinces of France. People are ſeldom guilty of exceſs in what is their daily fare. Nobody affects the character of liberality and good fellowſhip, by being profuſe of a liquor which is as cheap as ſmall beer. On the contrary, in the countries which from either exceſſive heat or cold produce no grapes, and where wine conſequently is dear and a rarity, drunkenneſs is a common vice, as among the northern nations, and all thoſe who live between the tropicks, the negroes, for example, on the coaſt of Guinea. When a French regiment comes from ſome of the northern provinces of France, where wine is ſomewhat dear, to be quartered in the ſouthern, where it is very cheap, the ſoldiers. I have frequently heard it obſerved, are at firſt debauched by the cheapneſs and novelty of good wine; but after a few months reſidence, the greater part of them become as ſober as the reſt of the inhabitants. Were the duties upon foreign wines, and the exciſes upon malt, beer, and ale, to be taken away all at once, it might, in the ſame manner, occaſion in Great Britain a pretty general and temporary drunkenneſs among the middling and inferior ranks of people, which would probably be ſoon followed by a permanent and almoſt univerſal [82] ſobriety. At preſent drunkenneſs is by no means the vice of peo⯑ple of faſhion, or of thoſe who can eaſily afford the moſt expen⯑ſive liquors. A gentleman drunk with ale, has ſcarce ever been ſeen among us. The reſtraints upon the wine trade in Great Britain beſides, do not ſo much ſeem calculated to hinder the people from going, if I may ſay ſo, to the alehouſe, as from going where they can buy the beſt and cheapeſt liquor. They favour the wine trade of Portugal, and diſcourage that of France. The Portugueſe, it is ſaid, indeed, are better cuſtomers for our manufactures than the French, and ſhould therefore be encou⯑raged in preference to them. As they give us their cuſtom, it is pretended, we ſhould give them our's. The ſneaking arts of un⯑derling tradeſmen are thus erected into political maxims for the conduct of a great empire: for it is the moſt underling tradeſmen only who make it a rule to employ chiefly their own cuſtomers. A great trader purchaſes his goods always where they are cheapeſt and beſt, without regard to any little intereſt of this kind.

BY ſuch maxims as theſe, however, nations have been taught that their intereſt conſiſted in beggaring all their neighbours. Each nation has been made to look with an invidious eye upon the proſperity of all the nations with which it trades, and to con⯑ſider their gain as its own loſs. Commerce, which ought naturally to be, among nations, as among individuals, a bond of union and friendſhip, has become the moſt fertile ſource of diſcord and animoſity. The capricious ambition of kings and miniſters has not, during the preſent and the preceeding century, been more fatal to the repoſe of Europe than the impertinent jealouſy of merchants and manufacturers. The violence and injuſtice of the rulers of mankind is an ancient evil, for which, I am afraid the nature of human affairs can ſcarce admit of a remedy. But the mean rapacity, the monopolizing ſpirit of merchants and manu⯑facturers, [83] who neither are, nor ought to be the rulers of man⯑kind, though it cannot perhaps be corrected, may very eaſily be prevented from diſturbing the tranquillity of any body but themſelves.

THAT it was the ſpirit of monopoly which originally both in⯑vented and propagated this doctrine, cannot be doubted; and they who firſt taught it were by no means ſuch fools as they who be⯑lieved it. In every country it always is and muſt be the intereſt of the great body of the people to buy whatever they want of thoſe who ſell it cheapeſt. The propoſition is ſo very manifeſt, that it ſeems ridiculous to take any pains to prove it; nor could it ever have been called in queſtion had not the intereſted ſophiſtry of merchants and manufacturers confounded the common ſenſe of mankind. Their intereſt is, in this directly oppoſite to that of the great body of the people. As it is intereſt of the freemen of a corporation to hinder the reſt of the inhabitants from employing any workmen but themſelves, ſo it is the intereſt of the merchants and manufacturers of every country to ſecure to themſelves the monopoly of the home market. Hence in Great Britain and in moſt other European countries the extraordi⯑nary duties upon almoſt all goods imported by alien merchants. Hence the high duties and prohibitions upon all thoſe foreign manufactures which can come into competition with our own. Hence too the extraordinary reſtraints upon the importation of almoſt all ſorts of goods from thoſe countries with which the ba⯑lance of trade is ſuppoſed to be diſadvantageous; that is, from thoſe againſt whom national animoſity happens to be moſt vio⯑lently inflamed.

THE wealth of a neighbouring nation, however, though danger⯑ous in war and politicks, is certainly advantageous in trade. In a [84] ſtate of hoſtility it may enable our enemies to maintain fleets and armies ſuperior to our own; but in a ſtate of peace and commerce it muſt likewiſe enable them to exchange with us to a greater value, and to afford a better market, either for the immediate produce of our own induſtry, or for whatever is purchaſed with that produce. As a rich man is likely to be a better cuſtomer to the induſtrious people in his neighbourhood, than a poor, ſo is likewiſe a rich nation. A rich man, indeed, who is himſelf a manufacturer, is a very dangerous neighbour to all thoſe who deal in the ſame way. All the reſt of the neighbourhood, however, by far the greateſt number, profit by the good market which his ex⯑pence affords them. They even profit by his underſelling the poorer workmen who deal in the ſame way with him. The ma⯑nufacturers of a rich nation, in the ſame manner, may no doubt be very dangerous rivals to thoſe of their neighbours. This very competition, however, is advantageous to the great body of the people, who profit greatly beſides by the good market which the great expence of ſuch a nation affords them in every other way. Private people who want to make a fortune, never think of retir⯑ing to the remote and poor provinces of the country, but reſort either to the capital or to ſome of the great commercial towns. They know, that where little wealth circulates there is little to be got, but that where a great deal is in motion, ſome ſhare of it may fall to them. The ſame maxims which would in this man⯑ner direct the common ſenſe of one, or ten, or twenty indivi⯑duals, ſhould regulate the judgement of one, or ten, or twenty millions, and ſhould make a whole nation regard the riches of its neighbours, as a probable cauſe and occaſion for itſelf to acquire riches. A nation that would enrich itſelf by foreign trade is certainly moſt likely to do ſo when its neighbours are all rich, induſtrious, and commercial nations. A great nation ſurrounded [85] on all ſides by wandering ſavages and poor barbarians might, no doubt, acquire riches by the cultivation of its own lands, and by its own interior commerce, but not by foreign trade. It ſeems to have been in this manner that the ancient Egyptians and the modern Chineſe acquired their great wealth. The ancient Egyp⯑tians, it is ſaid, neglected foreign commerce, and the modern Chineſe, it is known, hold it in the utmoſt contempt, and ſcarce deign to afford it the decent protection of the laws. The modern maxims of foreign commerce, by aiming at the impoveriſhment of all our neighbours, ſo far as they are capable of producing their intended effect, tend to render that very commerce inſigni⯑ficant and contemptible.

THERE is no commercial country in Europe of which the approaching ruin has not frequently been foretold by the pre⯑tended doctors of this ſyſtem, from an unfavourable balance of trade. After all the anxiety however which they have excited about this, after all the vain attempts of almoſt all trading nations to turn that balance in their own favour and againſt their neigh⯑bours, it does not appear that any one nation in Europe has been in any reſpect impoveriſhed by this cauſe. Every town and coun⯑try, on the contrary, in proportion as they have opened their ports to all nations; inſtead of being ruined by this free trade, as the principles of the commercial ſyſtem would lead us to ex⯑pect, have been enriched by it. Though there are in Europe, indeed, a few towns which in ſome reſpects deſerve the name of free ports, there is no country which does ſo. Holland, perhaps, approaches the neareſt to this character of any, though ſtill very remote from it; and Holland, it is acknowledged, not only derives its whole wealth, but a great part of its neceſſary ſubſiſtence, from foreign trade.

[86] THERE is another balance indeed, which has already been ex⯑plained, very different from the balance of trade, and which, according as it happens to be either favourable or unfavourable, neceſſarily occaſions the proſperity or decay of every nation. This is the balance of the annual produce and conſumption. If the exchangeable value of the annual produce, it has already been obſerved, exceeds that of the annual conſumption, the capital of the ſociety muſt annually increaſe in proportion to this exceſs. The ſociety in this caſe lives within its revenue, and what is annually ſaved out of its revenue, is naturally added to its capi⯑tal, and employed ſo as to increaſe ſtill further the annual pro⯑duce. If the exchangeable value of the annual produce, on the contrary, fall ſhort of the annual conſumption, the capital of the ſociety muſt annually decay in proportion to this deficiency. The expence of the ſociety in this caſe exceeds its revenue, and neceſſarily encroaches upon its capital. Its capital, therefore, muſt neceſſarily decay, and together with it, the exchangeable value of the annual produce of its induſtry.

THIS balance of produce and conſumption is entirely different from, what is called, the balance of trade. It might take place in a nation which had no foreign trade, but which was entirely ſeparated from all the world. It may take place in the whole globe of the earth, of which the wealth, population, and improve⯑ment may be either gradually increaſing or gradually decaying.

THE balance of produce and conſumption may be conſtantly in favour of a nation, though what is called the balance of trade be generally againſt it. A nation may import to a greater value than it exports for half a century, perhaps, together; the gold and ſilver which comes into it during all this time may be all im⯑mediately ſent out of it; its circulating coin may gradually decay, [87] different ſorts of paper money being ſubſtituted in its place, and even the debts too which it contracts in the principal nations with whom it deals may be gradually increaſing; and yet its real wealth, the exchangeable value of the annual produce of its lands and labour may, during the ſame period, have been increaſing in a much greater proportion. The ſtate of our North American colonies, and the trade which they carried on with Great Britain, before the commencement of the late diſturbances, may ſerve as a proof that this is by no means an impoſſible ſuppoſition.

CHAP. IV. Of Drawbacks.

MERCHANTS and manufacturers are not contented with the monopoly of the home market, but deſire likewiſe the moſt extenſive foreign ſale for their goods. Their country has no juriſdiction in foreign nations, and therefore can ſeldom procure them any monopoly there. They are generally obliged therefore to content themſelves with petitioning for certain encouragements to exportation.

OF theſe encouragements what are called Drawbacks ſeem to be the moſt reaſonable. To allow the merchant to draw back upon exportation, either the whole or a part of whatever exciſe or in⯑land duty is impoſed upon domeſtick induſtry, can never occaſion the exportation of a greater quantity of goods than what would have been exported had no duty been impoſed. Such encourage⯑ments do not tend to turn towards any particular employment a greater ſhare of the capital of the country, than what would go [88] to it of its own accord, but only to hinder the duty from driving away any part of that ſhare to other employments. They tend not to overturn that balance which naturally eſtabliſhes itſelf among all the various employments of the ſociety; but to hinder it from being overturned by the duty. They tend not to deſtroy but to preſerve, what it is in moſt caſes advantageous to pre⯑ſerve, the natural diviſion and diſtribution of labour in the ſociety.

THE ſame thing may be ſaid of the drawacks upon the re-expor⯑tation of foreign goods imported; which in Great Britain generally amount to by much the largeſt part of the duty upon importation. Half the duties impoſed by what is called the old ſubſidy, are drawn back univerſally, except upon goods exported to the Britiſh plan⯑tations; and frequently the whole, almoſt always a part of thoſe impoſed by later ſubſidies and impoſts. Drawbacks were, per⯑haps, originally granted for the encouragement of the carrying trade, which, as the freight of the ſhips is frequently paid by fo⯑reigners in money, was ſuppoſed to be peculiarly fitted for bring⯑ing gold and ſilver into the country. But though the carrying trade certainly deſerves no peculiar encouragement, though the motive of the inſtitution was, perhaps, abundantly fooliſh, the inſtitution itſelf ſeems reaſonable enough. Such drawbacks cannot force into this trade a greater ſhare of the capital of the country than what would have gone to it of its own accord, had there been no duties upon importation. They only prevent its being excluded altogether by thoſe duties. The carrying trade, though it deſerves no preference, ought not to be precluded, but to be left free like all other trades. It is a neceſſary reſource for thoſe capitals which cannot find employment either in the agriculture or in the manufactures of the country, either in its home trade or in its foreign trade of conſumption.

[89] THE revenue of the cuſtoms, inſtead of ſuffering, profits from ſuch drawbacks, by that part of the duty which is retained. If the whole duties had been retained, the foreign goods upon which they are paid, could ſeldom have been exported, nor conſequently imported, for want of a market. The duties, therefore, of which a part is retained, would never have been paid.

THESE reaſons ſeem ſufficiently to juſtify drawbacks, and would juſtify them, though the whole duties, whether upon the produce of domeſtick induſtry, or upon foreign goods, were always drawn back upon exportation. The revenue of exciſe would in this caſe, indeed, ſuffer a little, and that of the cuſtoms a good deal more; but the natural balance of induſtry, the natural diviſion and diſtribution of labour, which is always more or leſs diſturbed by ſuch duties, would be more nearly re-eſtabliſhed by ſuch a regulation.

THESE reaſons, however, will juſtify drawbacks only upon ex⯑porting goods to thoſe countries which are altogether foreign and independent, not to thoſe in which our merchants and manu⯑facturers enjoy a monopoly. A drawback, for example, upon the exportation of European goods to our American colonies, will not always occaſion a greater exportation than what would have taken place without it. By means of the monopoly which our merchants and manufacturers enjoy there, the ſame quantity might frequently, perhaps, be ſent thither, though the whole duties were retained. The drawback, therefore, may frequently be pure loſs to the revenue of exciſe and cuſtoms, without altering the ſtate of the trade, or rendering it in any reſpect more exten⯑ſive. How far ſuch drawbacks can be juſtified, as a proper en⯑couragement to the induſtry of our colonies, or how far it is [90] advantageous to the mother country, that they ſhould be exempted from taxes which are paid by all the reſt of their fellow ſubjects, will appear hereafter when I come to treat of colonies.

DRAWBACKS however, it muſt always be underſtood, are uſeful only in thoſe caſes in which the goods for the exportation of which they are given, are really exported to ſome foreign country; and not clandeſtinely reimported into our own. That ſome drawbacks, particularly thoſe upon tobacco, have frequently been abuſed in this manner, and have given occaſion to many frauds equally hurtful both to the revenue and to the fair trader, is well known.

CHAP. V. Of Bounties.

BOUNTIES upon exportation are, in Great Britain, fre⯑quently petitioned for, and ſometimes granted to the produce of particular branches of domeſtick induſtry. By means of them our merchants and manufacturers, it is pretended, will be enabled to ſell their goods as cheap or cheaper than their rivals in the foreign market. A greater quantity, it is ſaid, will thus be export⯑ed, and the balance of trade conſequently turned more in favour of our own country. We cannot give our workmen a monopoly in the foreign, as we have done in the home market. We cannot force foreigners to buy their goods, as we have done our own coun⯑trymen. The next beſt expedient, it has been thought, therefore, is to pay them for buying. It is in this manner that the mercan⯑tile ſyſtem propoſes to enrich the whole country, and to put money into all our pockets by means of the balance of trade.

[91] BOUNTIES, it is allowed, ought to be given to thoſe branches of trade only which cannot be carried on without them. But every branch of trade in which the merchant can ſell his goods for a price which replaces to him, with the ordinary profits of ſtock, the whole capital employed in preparing and ſending them to mar⯑ket, can be carried on without a bounty. Every ſuch branch is evidently upon a level with all the other branches of trade which are carried on without bounties, and cannot therefore require one more than they. Thoſe trades only require bounties in which the merchant is obliged to ſell his goods for a price which does not replace to him his capital, together with the ordinary profit; or in which he is obliged to ſell them for leſs than it really coſts him to ſend them to market. The bounty is given in order to make up this loſs, and to encourage him to continue, or perhaps to be⯑gin, a trade of which the expence is ſuppoſed to be greater than the returns, of which every operation eats up a part of the capi⯑tal employed in it, and which is of ſuch a nature, that, if all other trades reſembled it, there would ſoon be no capital left in the country.

THE trades, it is to be obſerved, which are carried on by means of bounties, are the only ones which can be carried on between two nations for any conſiderable time together, in ſuch a manner as that one of them ſhall always and regularly loſe, or ſell its goods for leſs than it really coſts to ſend them to market. But if the bounty did not repay to the merchant what he would otherwiſe loſe upon the price of his goods, his own intereſt would ſoon oblige him to employ his ſtock in another way, or to find out a trade in which the price of the goods would replace to him, with the ordi⯑nary profit, the capital employed in ſending them to market. The effect of bounties, like that of all the other expedients of the mer⯑cantile ſyſtem, can only be to force the trade of a country into a [92] channel much leſs advantageous than that in which it would natu⯑rally run of its own accord.

THE ingenious and well informed author of the tracts upon the corn trade has ſhown very clearly, that ſince the bounty upon the exportation of corn was firſt eſtabliſhed, the price of the corn exported, valued moderately enough, has exceeded that of the corn imported, valued very high, by a much greater ſum than the amount of the whole bounties which have been paid during that period. This, he imagines, upon the true principles of the mer⯑cantile ſyſtem, is a clear proof that this forced corn trade is bene⯑ficial to the nation; the value of the exportation exceeding that of the importation by a much greater ſum than the whole extraor⯑dinary expence which the publick has been at in order to get it exported. He does not conſider that this extraordinary expence, or the bounty, is the ſmalleſt part of the expence which the exporta⯑tion of corn really coſts the ſociety. The capital which the far⯑mer employed in raiſing it muſt likewiſe be taken into the account. Unleſs the price of the corn when ſold in the foreign markets re⯑places, not only the bounty, but this capital, together with the ordinary profits of ſtock, the ſociety is a loſer by the difference, or the national ſtock is ſo much diminiſhed. But the very reaſon for which it has been thought neceſſary to grant a bounty is the ſup⯑poſed inſufficiency of the price to do this.

THE average price of corn, it has been ſaid, has fallen conſider⯑ably ſince the eſtabliſhment of the bounty. That the average price of corn began to fall ſomewhat towards the end of the laſt cen⯑tury, and has continued to do ſo during the courſe of the ſixty-four firſt years of the preſent, I have already endeavoured to ſhow. But this event, ſuppoſing it to be as real as I believe it to be, muſt have happened in ſpite of the bounty, and cannot poſſibly have happened in conſequence of it.

[93] IN years of plenty, it has already been obſerved, the bounty, by occaſioning an extraordinary exportation, neceſſarily keeps up the price of corn in the home market above what it would naturally fall to. To do ſo was the avowed purpoſe of the inſtitution. In years of ſcarcity, though the bounty is frequently ſuſpended, yet the great exportation which it occaſions in years of plenty, muſt frequently hinder more or leſs the plenty of one year from relieving the ſcarcity of another. Both in years of plenty, and in years of ſcarcity, therefore, the bounty neceſſarily tends to raiſe the money price of corn ſomewhat higher than it otherwiſe would be in the home market.

THAT, in the actual ſtate of tillage, the bounty muſt neceſſarily have this tendency, will not, I apprehend, be diſputed by any rea⯑ſonable perſon. But it has been thought by many people, that by ſecuring to the farmer a better price than he could otherwiſe expect in the actual ſtate of tillage, it tends to encourage tillage; and that the conſequent increaſe of corn may, in a long period of years, lower its price more than the bounty can raiſe it in the actual ſtate which tillage may, at the end of that period, happen to be in.

I ANSWER, that this might be the caſe if the effect of the bounty was to raiſe the real price of corn, or to enable the farmer with an equal quantity of it to maintain a greater number of labourers in the ſame manner, whether liberal, moderate, or ſcanty, that other labourers are commonly maintained in his neighbourhood. But neither the bounty, it is evident, nor any other human inſtitution, can have any ſuch effect. It is not the real, but the nominal price of corn only, which can be at all affected by the bounty.

THE real effect of the bounty is not ſo much to raiſe the real value of corn, as to degrade the real value of ſilver; or to make an equal quantity of it exchange for a ſmaller quantity, not only of [94] corn, but of all other commodities: for the money price of corn regulates that of all other commodities.

IT regulates the money price of labour, which muſt always be ſuch as to enable the labourer to purchaſe a quantity of corn ſuf⯑ficient to maintain him and his family either in the liberal, mode⯑rate, or ſcanty manner in which the advancing, ſtationary, or de⯑clining circumſtances of the ſociety oblige his employers to main⯑tain him.

IT regulates the money price of all the other parts of the rude produce of land, which, in every period of improvement, muſt bear a certain proportion to that of corn, though this proportion is different in different periods. It regulates, for example, the money price of graſs and hay, of butcher's meat, of horſes, and the maintenance of horſes, of land carriage conſequently, or of the greater part of the inland commerce of the country.

BY regulating the money price of all the other parts of the rude produce of land, it regulates that of the materials of all manufac⯑tures. By regulating the money price of labour, it regulates that of manufacturing art and induſtry. And by regulating both, it regulates that of the compleat manufacture. The money price of labour, and of every thing that is the produce either of land or labour, muſt neceſſarily either riſe or fall in proportion to the mo⯑ney price of corn.

THOUGH in conſequence of the bounty, therefore, the farmer ſhould be enabled to ſell his corn for four ſhillings the buſhel in⯑ſtead of three and ſixpence, and to pay his landlord a money rent proportionable to this riſe in the money price of his produce; yet, if in conſequence of this riſe in the price of corn, four ſhillings will purchaſe no more goods of any other kind than three and ſix⯑pence [95] would have done before, neither the circumſtances of the farmer, nor thoſe of the landlord, will be in the ſmalleſt degree mended by this change. The farmer will not be able to cultivate better: the landlord will not be able to live better.

THAT degradation in the value of ſilver which is the effect of the fertility of the mines, and which operates equally, or very near equally, through the greater part of the commercial world, is a matter of very little conſequence to any particular country. The conſequent riſe of all money prices, though it does not make thoſe who receive them really richer, does not make them really poorer. A ſervice of plate becomes really cheaper, and every thing elſe re⯑mains preciſely of the ſame real value as before.

BUT that degradation in the value of ſilver which, being the effect either of the peculiar ſituation, or of the political inſtitu⯑tions of a particular country, takes place only in that country, is a matter of very great conſequence, which, far from tending to make any body really richer, tends to make every body really poorer. The riſe in the money price of all commodities, which is in this caſe peculiar to that country, tends to diſcourage more or leſs every ſort of induſtry which is carried on within it, and to enable foreign nations, by furniſhing almoſt all ſorts of goods for a ſmaller quantity of ſilver than its own workmen can afford to do, to underſell them, not only in the foreign, but even in the home market.

IT is the peculiar ſituation of Spain and Portugal, as proprietors of the mines, to be the diſtributors of gold and ſilver to all the other countries of Europe. Thoſe metals ought naturally, there⯑fore, to be ſomewhat cheaper in Spain and Portugal than in any other part of Europe. The difference, however, ſhould be no [96] more than the amount of the freight and inſurance; and, on ac⯑count of the great value and ſmall bulk of thoſe metals, their freight is no great matter, and their inſurance is the ſame as that of any other goods of equal value. Spain and Portugal, there⯑fore, could ſuffer very little from their peculiar ſituation, if they did not aggravate its diſadvantages by their political inſtitutions.

SPAIN by taxing, and Portugal by prohibiting the exportation of gold and ſilver, load that exportation with the expence of ſmug⯑gling, and raiſe the value of thoſe metals in other countries ſo much more above what it is in their own, by the whole amount of this expence. When you dam up a ſtream of water, as ſoon as the dam is full, as much water muſt run over the dam-head as if there was no dam at all. The prohibition of exportation can⯑not detain a greater quantity of gold and ſilver in Spain and Por⯑tugal than what they can afford to employ, than what the annual produce of their land and labour will allow them to employ, in coin, plate, gilding, and other ornaments of gold and ſilver. When they have got this quantity the dam is full, and the whole ſtream which flows in afterwards muſt run over. The annual exportation of gold and ſilver from Spain and Portugal accordingly is, by all accounts, notwithſtanding theſe reſtraints, very near equal to the whole annual importation. As the water, however, muſt always be deeper behind the dam-head than before it, ſo the quantity of gold and ſilver which theſe reſtraints detain in Spain and Por⯑tugal muſt, in proportion to the annual produce of their land and labour, be greater that what is to be found in other countries. The higher and ſtronger the dam-head, the greater muſt be the difference in the depth of water behind and before it. The higher the tax, the higher the penalties with which the prohibition is guard⯑ed, the more vigilant and ſevere the police which looks after the execution of the law, the greater muſt be the difference in the [97] proportion of gold and ſilver to the annual produce of the land and labour of Spain and Portugal, and to that of other countries. It is ſaid accordingly to be very conſiderable, and that you fre⯑quently find there a profuſion of plate in houſes, where there is nothing elſe which would, in other countries, be thought ſuitable or correſpondent to this ſort of magnificence. The cheapneſs of gold and ſilver, or, what is the ſame thing, the dearneſs of all commodities, which is the neceſſary effect of this redundancy of the precious metals, diſcourages both the agriculture and manufac⯑tures of Spain and Portugal, and enables foreign nations to ſupply them with many ſorts of rude, and with almoſt all ſorts of manu⯑factured produce, for a ſmaller quantity of gold and ſilver than what they themſelves can either raiſe or make them for at home. The tax and prohibition operate in two different ways. They not only lower very much the value of the precious metals in Spain and Portugal, but by detaining there a certain quantity of thoſe metals which would otherwiſe flow over other countries, they keep up their value in thoſe other countries ſomewhat above what it otherwiſe would be, and thereby give thoſe countries a double advan⯑tage in their commerce with Spain and Portugal. Open the flood⯑gates and there will preſently be leſs water above, and more below, the dam-head, and it will ſoon come to a level in both places. Remove the tax and the prohibition, and as the quantity of gold and ſilver will diminiſh conſiderably in Spain and Portugal, ſo it will increaſe ſomewhat in other countries, and the value of thoſe metals, their proportion to the annual produce of land and labour, will ſoon come to a level, or very near to a level, in all. The loſs which Spain and Portugal could ſuſtain by this exportation of their gold and ſilver would be altogether nominal and imaginary. The nominal value of their goods, and of the annual produce of their land and labour would fall, and would be expreſſed or repreſented by a ſmaller quantity of ſilver than before: but their real value would [98] be the ſame as before, and would be ſufficient to maintain, com⯑mand, and employ, the ſame quantity of labour. As the nomi⯑nal value of their goods would fall, the real value of what re⯑mained of their gold and ſilver would riſe, and a ſmaller quantity of thoſe metals would anſwer all the ſame purpoſes of commerce and circulation which had employed a greater quantity before. The gold and ſilver which would go abroad would not go abroad for nothing, but would bring back an equal value of goods of ſome kind or another. Thoſe goods too would not be all matters of mere luxury and expence, to be conſumed by idle people who pro⯑duce nothing in return for their conſumption. As the real wealth and revenue of idle people would not be augmented by this extraor⯑dinary exportation of gold and ſilver, ſo neither would their con⯑ſumption be much augmented by it. Thoſe goods would, proba⯑bly, the greater part of them, and certainly ſome part of them, conſiſt in materials, tools, and proviſions, for the employment and maintenance of induſtrious people, who would reproduce, with a profit, the full value of their conſumption. A part of the dead ſtock of the ſociety would thus be turned into active ſtock, and would put into motion a greater quantity of induſtry than had been employed before. The annual produce of their land and labour would immediately be augmented a little, and in a few years would, probably, be augmented a great deal; their induſtry being thus relieved from one of the moſt oppreſſive burdens which it at pre⯑ſent labours under.

THE bounty upon the exportation of corn neceſſarily ope⯑rates exactly in the ſame way as this abſurd policy of Spain and Portugal. Whatever be the actual ſtate of tillage, it renders our corn ſomewhat dearer in the home market than it otherwiſe would be in that ſtate, and ſomewhat cheaper in the foreign; and as the average money price of corn regulates more or leſs that of [99] all other commodities, it lowers the value of ſilver conſiderably in the one, and tends to raiſe it a little in the other. It enables foreigners, the Dutch in particular, not only to eat our corn cheaper than they otherwiſe could do, but ſometimes to eat it cheaper than even our own people can do upon the ſame occa⯑ſions; as we are aſſured by an excellent authority, that of Sir Mathew Decker. It hinders our own workmen from furniſhing their goods for ſo ſmall a quantity of ſilver as they otherwiſe might do; and enables the Dutch to furniſh their's for a ſmaller. It tends to render our manufactures ſomewhat dearer in every market, and their's ſomewhat cheaper than they otherwiſe would be, and conſequently to give their induſtry a double advantage over our own.

THE bounty, as it raiſes in the home market, not the real, but only the nominal price of our corn, as it augments, not the quantity of labour which a certain quantity of corn can maintain and employ, but only the quantity of ſilver which it will exchange for, it diſcourages our manufactures without rendering the ſmalleſt real ſervice either to our farmers or country gentlemen. It puts, indeed, a little more money into the pockets of both, and it will perhaps be ſomewhat difficult to perſuade the greater part of them that this is not rendering them a very real ſervice. But if this money ſinks in its value, in the quantity of labour, proviſions, and commodities of all different kinds which it is capable of pur⯑chaſing, as much as it riſes in its quantity, the ſervice will be merely nominal and imaginary.

THERE is, perhaps, but one ſet of men in the whole com⯑monwealth to whom the bounty either was or could be really ſerviceable. Theſe were the corn merchants, the exporters and importers of corn. In years of plenty the bounty neceſſarily [100] occaſioned a greater exportation than would otherwiſe have taken place; and by hindering the plenty of one year from relieving the ſcarcity of another, it occaſioned in years of ſcarcity a greater importation than would otherwiſe have been neceſſary. It in⯑creaſed the buſineſs of the corn merchant in both, and in years of ſcarcity it not only enabled him to import a greater quantity, but to ſell it for a better price, and conſequently with a greater profit than he could otherwiſe have made, if the plenty of one year had not been more or leſs hindered from relieving the ſcar⯑city of another. It is in this ſett of men, accordingly, that I have obſerved the greateſt zeal for the continuance or renewal of the bounty.

OUR country gentlemen, when they impoſed the high duties upon the importation of foreign corn, which in times of moderate plenty amount to a prohibition, and when they eſtabliſhed the bounty, ſeem to have imitated the conduct of our manufacturers. By the one inſtitution, they ſecured to themſelves the monopoly of the home market, and by the other they endeavoured to prevent that market from ever being overſtocked with their commodity. By both they endeavoured to raiſe its real value, in the ſame man⯑ner as our manufacturers had, by the like inſtitutions, raiſed the real value of many different ſorts of manufactured goods. They did not perhaps attend to the great and eſſential difference which nature has eſtabliſhed between corn and almoſt every other ſort of goods. When either by the monopoly of the home market, or by a bounty upon exportation, you enable our woollen or linen manufacturers to ſell their goods for ſomewhat a better price than they otherwiſe could get for them, you raiſe, not only the nomi⯑nal, but the real price of thoſe goods. You render them equiva⯑lent to a greater quantity of labour and ſubſiſtence, you increaſe, not only the nominal, but the real profit, the real wealth and [101] revenue of thoſe manufacturers, and you enable them either to live better themſelves, or to employ a greater quantity of labour in thoſe particular manufactures. You really encourage thoſe manufactures, and direct towards them a greater quantity of the induſtry of the country, than what would probably go to them of its own accord. But when by the like inſtitutions you raiſe the nominal or money price of corn, you do not raiſe its real value. You do not increaſe the real wealth, the real revenue either of our farmers or country gentlemen. You do not encou⯑rage the growth of corn, becauſe you do not enable them to maintain and employ more labourers in raiſing it. The nature of things has ſtamped upon corn a real value which no human inſtitution can alter. No bounty upon exportation, no monopoly of the home market can raiſe it. The freeſt competition cannot lower it. Through the world in general that value is equal to the quantity of labour which it can maintain, and in every par⯑ticular place it is equal to the quantity of labour which it can maintain in the way, whether liberal, moderate, or ſcanty, in which labour is commonly maintained in that place. Woollen or linen cloth are not the regulating commodities by which the real value of all other commodities muſt be finally meaſured and determined. Corn is. The real value of every other commodity is finally meaſured and determined by the proportion which its average money price bears to the average money price of corn. The real value of corn does not vary with thoſe variations in its average money price, which ſometimes occur from one century to another. It is the real value of ſilver which varies with them.

BOUNTIES upon the exportation of any home-made commodity are liable, firſt, to that general objection which may be made to all the different expedients of the mercantile ſyſtem; the objection of forcing ſome part of the induſtry of the country into a channel [102] leſs advantageous than that in which it would run of its own accord: and, ſecondly, to the particular objection of forcing it, not only into a channel that is leſs advantageous, but into one that is actually diſadvantageous; the trade which cannot be carried on but by means of a bounty being neceſſarily a loſting trade. The bounty upon the exportation of corn is liable to this further objection, that it can in no reſpect promote the raiſing of that par⯑ticular commodity of which it was meant to encourage the produc⯑tion. When our country gentlemen, therefore, demanded the eſta⯑bliſhment of the bounty, though they acted in imitation of our merchants and manufacturers, they did not act with that com⯑pleat comprehenſion of their own intereſt which commonly directs the conduct of thoſe two other orders of people. They loaded the publick revenue with a very conſiderable expence; but they did not in any reſpect increaſe the real value of their own commodity, and by lowering ſomewhat the real value of ſilver they diſcouraged in ſome degree the general induſtry of the country, and inſtead of advancing, retarded more or leſs the improvement of their own lands, which neceſſarily depends upon the general induſtry of the country.

To encourage the production of any commodity, a bounty upon production, one ſhould imagine, would have a more direct operation than one upon exportation. It has, however, been more rarely granted. The prejudices eſtabliſhed by the commer⯑cial ſyſtem have taught us to believe that national wealth ariſes more immediately from exportation than from production. It has been more favoured accordingly, as the more immediate means of bringing money into the country. Bounties upon production, it has been ſaid too, have been found by experience more liable to frauds than thoſe upon exportation. How far this is true, I know not. That bounties upon exportation have been abuſed to many [103] fraudulent purpoſes, is very well known. But it is not the intereſt of merchants and manufacturers, the great inventors of all theſe expedients, that the home market ſhould be overſtocked with their goods, an event which a bounty upon production might ſome⯑times occaſion. A bounty upon exportation, by enabling them to ſend abroad the ſurplus part, and to keep up the price of what remains in the home market, effectually prevents this. Of all the expedients of the mercantile ſyſtem, accordingly, it is the one of which they are the fondeſt. I have known the different under⯑takers of ſome particular works agree privately among themſelves to give a bounty out of their own pockets upon the exportation of a certain proportion of the goods which they dealt in. This expedient ſucceeded ſo well that it more than doubled the price of their goods in the home market, notwithſtanding a very conſider⯑able increaſe in the produce. The operation of the bounty upon corn muſt have been wonderfully different, if it has lowered the money price of that commodity.

SOMETHING like a bounty upon production, however, has been granted upon ſome particular occaſions. The encourage⯑ments given to the white-herring and whale-fiſheries may, perhaps, be conſidered as ſomewhat of this nature. They tend directly to render the goods cheaper in the home market than they otherwiſe would be in the actual production. In other reſpects their effects are the ſame as thoſe of bounties upon exportation. By means of them a part of the capital of the country is em⯑ployed in bringing goods to market, of which the price does not repay the coſt, together with the ordinary profits of ſtock. But though the bounties to thoſe fiſheries do not contribute to the opulence of the nation, they may perhaps be defended as con⯑ducing to its defence, by augmenting the number of its ſailors and ſhipping. This may frequently be done by means of ſuch [104] bounties, at a much ſmaller expence than by keeping up a great ſtanding navy, if I may uſe ſuch an expreſſion, in time of peace, in the ſame manner as a ſtanding army.

SOME other bounties may be vindicated perhaps upon the ſame principle. It is of importance that the kingdom ſhould depend as little as poſſible upon its neighbours for the manufactures neceſſary for its defence; and if theſe cannot otherwiſe be main⯑tained at home, it is reaſonable that all other branches of induſtry ſhould be taxed in order to ſupport them. The bounties upon the importation of naval ſtores from America, upon Britiſh made fail-cloth, and upon Britiſh made gunpowder, may perhaps all three be vindicated upon this principle. The firſt is a bounty upon the production of America, for the uſe of Great Britain. The two others are bounties upon exportation.

WHAT is called a bounty is ſometimes no more than a drawback, and conſequently is not liable to the ſame objections as what is properly a bounty. The bounty, for example, upon refined ſugar exported may be conſidered as a drawback of the duties upon the brown and muſcovado ſugars, from which it is made. The bounty upon wrought ſilk exported, a drawback of the duties upon raw and thrown ſilk imported. The bounty upon gun⯑powder exported, a drawback of the duties upon brimſtone and ſaltpetre imported. In the language of the cuſtoms thoſe allow⯑ances only are called drawbacks, which are given upon goods exported in the ſame form in which they are imported. When that form has been altered by manufacture of any kind, they are called bounties.

PREMIUMS given by the publick to artiſts and manufacturers who excell in their particular occupations, are not liable to the ſame objections as bounties. By encouraging extraordinary dex⯑terity [105] and ingenuity, they ſerve to keep up the emulation of the workmen actually employed in thoſe reſpective occupations, and are not conſiderable enough to turn towards any one of them a greater ſhare of the capital of the country than what would go to it of its own accord. Their tendency is not to overturn the natural balance of employments, but to render the work which is done in each as perfect and compleat as poſſible. The expence of premiums, beſides, is very trifling; that of bounties very great. The bounty upon corn alone has ſometimes coſt the publick in one year, more than three hundred thouſand pounds.

BOUNTIES are ſometimes called premiums, as drawbacks are ſometimes called bounties. But we muſt in all caſes attend to the nature of the thing, without paying any regard to the word.

I CANNOT conclude this chapter concerning bounties, with⯑out obſerving that the praiſes which have been beſtowed upon the law which eſtabliſhes the bounty upon the exportation of corn, and upon that ſyſtem of regulations which is connected with it, are altogether unmerited. A particular examination of the nature of the corn trade, and of the principal Britiſh laws which relate to it, will ſufficiently demonſtrate the truth of this aſſertion. The great importance of this ſubject muſt juſtify the length of the digreſſion.

THE trade of the corn merchant is compoſed of four different branches, which, though they may ſometimes be all carried on by the ſame perſon, are in their own nature four ſeparate and diſtinct trades. Theſe are, firſt, the trade of the inland dealer; ſecondly, that of the merchant importer for home conſumption; thirdly, that of the merchant exporter of home produce for foreign con⯑ſumption; and, fourthly, that of the merchant carrier, or of the importer of corn in order to export it again.

[106] I. THE intereſt of the inland dealer, and that of the great body of the people, how oppoſite ſoever they may at firſt ſight appear, are, even in years of the greateſt ſcarcity, exactly the ſame. It is his intereſt to raiſe the price of his corn as high as the real ſcarcity of the ſeaſon requires, and it can never be his intereſt to raiſe it higher. By raiſing the price he diſcourages the conſumption, and puts every body more or leſs, but particularly the inferior ranks of people, upon thrift and good management. If, by raiſing it too high, he diſcourages the conſumption ſo much that the ſupply of the ſeaſon is likely to go beyond the conſumption of the ſeaſon, and to laſt for ſome time after the next crop begins to come in, he runs the hazard, not only of loſing a conſiderable part of his corn by natural cauſes, but of being obliged to ſell what remains of it for much leſs than what he might have had for it ſeveral months before. If by not raiſing the price high enough he diſcourages the conſumption ſo little, that the ſupply of the ſeaſon is likely to fall ſhort of the conſumption of the ſeaſon, he not only loſes a part of the profit which he might otherwiſe have made, but he expoſes the people to ſuffer before the end of the ſeaſon, inſtead of the hard⯑ſhips of a dearth, the dreadful horrors of a famine. It is the intereſt of the people that their daily, weekly, and monthly con⯑ſumption, ſhould be proportioned as exactly as poſſible to the ſup⯑ply of the ſeaſon. The intereſt of the inland corn dealer is the ſame. By ſupplying them, as nearly as he can judge, in this pro⯑portion, he is likely to ſell all his corn for the higheſt price, and with the greateſt profit; and his knowledge of the ſtate of the crop, and of his daily, weekly, and monthly ſales, enable him to judge, with more or leſs accuracy, how far they really are ſupplied in this manner. Without intending the intereſt of the people, he is neceſſarily led, by a regard to his own intereſt, to treat them, even in years of ſcarcity, pretty much in the ſame manner as the pru⯑dent maſter of a veſſel is ſometimes obliged to treat his crew. When [107] he foreſees that proviſions are likely to run ſhort, he puts them upon ſhort allowance. Though from exceſs of caution he ſhould ſometimes do this without any real neceſſity, yet all the inconveni⯑encies which his crew can thereby ſuffer are inconſiderable in com⯑pariſon of the danger, miſery, and ruin, to which they might ſometimes be expoſed by a leſs provident conduct. Though from exceſs of avarice, in the ſame manner, the inland corn merchant ſhould ſometimes raiſe the price of his corn ſomewhat higher than the ſcarcity of the ſeaſon requires, yet all the inconveniencies which the people can ſuffer from this conduct, which effectually ſecures them from a famine in the end of the ſeaſon, are inconſiderable in compariſon of what they might have been expoſed to by a more liberal way of dealing in the beginning of it. The corn merchant himſelf is likely to ſuffer the moſt by this exceſs of avarice; not only from the indignation which it generally excites againſt him, but, though he ſhould eſcape the effects of this indignation, from the quantity of corn which it neceſſarily leaves upon his hands in the end of the ſeaſon, and which, if the next ſeaſon happens to prove favourable, he muſt always fell for a much lower price than he might otherwiſe have had.

WERE it poſſible, indeed, for one great company of merchants to poſſeſs themſelves of the whole crop of an extenſive country, it might, perhaps, be their intereſt to deal with it as the Dutch are ſaid to do with the ſpiceries of the Molluccas, to deſtroy or throw away a conſiderable part of it, in order to keep up the price of the reſt. But it is ſcarce poſſible, even by the violence of law, to eſta⯑bliſh ſuch an extenſive monopoly with regard to corn; and, where⯑ever the law leaves the trade free, it is of all commodities the leaſt liable to be engroſſed or monopoliſed by the force of a few large capitals, which buy up the greater part of it. Not only its value far exceeds what the capitals of a few private men are capable of [108] purchaſing, but, ſuppoſing they were capable of purchaſing it, the manner in which it is produced renders this purchaſe altogether impracticable. As in every civilized country it is the commodity of which the annual conſumption is the greateſt, ſo a greater quan⯑tity of induſtry is annually employed in producing corn than in producing any other commodity. When it firſt comes from the ground too, it is neceſſarily divided among a greater number of owners than any other commodity; and theſe owners can never be collected into one place like a number of independent manufactu⯑rers, but are neceſſarily ſcattered through all the different corners of the country. Theſe firſt owners either immediately ſupply the conſumers in their own neighbourhood, or they ſupply other inland dealers who ſupply thoſe conſumers. The inland dealers in corn, therefore, including both the farmer and the baker, are neceſſa⯑rily more numerous than the dealers in any other commodity, and their diſperſed ſituation renders it altogether impoſſible for them to enter into any general combination. If in a year of ſcarcity, there⯑fore, any of them ſhould find that he had a good deal more corn upon hand than, at the current price, he could hope to diſpoſe of before the end of the ſeaſon, he would never think of keeping up this price to his own loſs, and to the ſole benefit of his rivals and competitors, but would immediately lower it in order to get rid of his corn before the new crop began to come in. The ſame mo⯑tives, the ſame intereſts, which would thus regulate the conduct of any one dealer, would regulate that of every other, and oblige them all in general to fell their corn at the price which, according to the beſt of their judgement, was moſt ſuitable to the ſcarcity or plenty of the ſeaſon.

WHOEVER examines, with attention, the hiſtory of the dearths and famines which have afflicted any part of Europe, during either the courſe of the preſent or that of the two preceeding centuries, [109] of ſeveral of which we have pretty exact accounts, will find, I believe, that a dearth never has ariſen from any combination among the inland dealers in corn, nor from any other cauſe but a real ſcar⯑city, occaſioned ſometimes perhaps, and in ſome particular places, by the waſte of war, but in by far the greateſt number of caſes, by the fault of the ſeaſons; and that a famine has never ariſen from any other cauſe but the violence of government attempting, by improper means, to remedy the inconveniencies of a dearth.

IN an extenſive corn country, between all the different parts of which there is a free commerce and communication, the ſcarcity occaſioned by the moſt unfavourable ſeaſons can never be ſo great as to produce a famine; and the ſcantieſt crop, if managed with frugality and oeconomy, will maintain, through the year, the ſame number of people that are commonly fed in a more affluent man⯑ner by one of moderate plenty. The ſeaſons moſt unfavourable to the crop are thoſe of exceſſive drought or exceſſive rain. But, as corn grows equally upon high and low lands, upon grounds that are diſpoſed to be too wet, and upon thoſe that are diſpoſed to be too dry, either the drought or the rain which is hurtful to one part of the country is favourable to another; and though both in the wet and in the dry ſeaſon the crop is a good deal leſs than in one more properly tempered, yet in both what is loſt in one part of the country is in ſome meaſure compenſated by what is gained in the other. In rice countries, where the crop not only requires a very moiſt ſoil, but where in a certain period of its growing it muſt be laid under water, the effects of a drought are much more diſ⯑mal. Even in ſuch countries, however, the drought is, perhaps, ſcarce ever ſo univerſal as neceſſarily to occaſion a famine, if the government would allow a free trade. The drought in Bengal, a few years ago, might probably have occaſioned a very great dearth. Some improper regulations, ſome injudicious reſtraints impoſed by [110] the ſervants of the Eaſt India Company upon the rice trade, con⯑tributed, perhaps, to turn that dearth into a famine.

WHEN the government, in order to remedy the inconveniencies of a dearth, orders all the dealers to ſell their corn at what it ſup⯑poſes a reaſonable price, it either hinders them from bringing it to market, which may ſometimes produce a famine, even in the begin⯑ning of the ſeaſon; or if they bring it thither, it enables the peo⯑ple, and thereby encourages them to conſume it ſo faſt, as muſt neceſſarily produce a famine before the end of the ſeaſon. The unlimited, unreſtrained freedom of the corn trade, as it is the only effectual preventative of the miſeries of a famine, ſo it is the beſt palliative of the inconveniencies of a dearth; for the incon⯑veniencies of a real ſcarcity cannot be remedied; they can only be palliated. No trade deſerves more the full protection of the law, and no trade requires it ſo much; becauſe no trade is ſo much ex⯑poſed to popular odium.

IN years of ſcarcity the inferior ranks of people impute their diſtreſs to the avarice of the corn merchant, who becomes the ob⯑ject of their hatred and indignation. Inſtead of making profit upon ſuch occaſions, therefore, he is often in danger of being utterly ruined, and of having his magazines plundered and de⯑ſtroyed by their violence. It is in years of ſcarcity, however, when prices are high, that the corn merchant expects to make his principal profit. He is generally in contract with ſome farmers to furniſh him for a certain number of years with a certain quan⯑tity of corn at a certain price. This contract price is ſettled ac⯑cording to what is ſuppoſed to be the moderate and reaſonable, that is, the ordinary or average price, which, before the late years of ſcarcity, was commonly about eight and twenty ſhillings for the quarter of wheat, and for that of other grain in proportion. [111] In years of ſcarcity, therefore, the corn merchant buys a great part of his corn for the ordinary price, and ſells it for a much higher. That this extraordinary profit, however, is no more than ſufficient to put his trade upon a fair level with other trades, and to compen⯑ſate the many loſſes which he ſuſtains upon other occaſions, both from the periſhable nature of the commodity itſelf, and from the frequent and unforeſeen fluctuations of its price, ſeems evident enough, from this ſingle circumſtance, that great fortunes are as ſeldom made in this as in any other trade. The popular odium, however, which attends it in years of ſcarcity, the only years in which it can be very profitable, renders people of character and fortune averſe to enter into it. It is abandoned to an inferior ſett of dealers; and millers, bakers, mealmen and meal factors, toge⯑ther with a number of wretched huckſters, are almoſt the only middle people that, in the home market, come between the grower and the conſumer.

THE ancient policy of Europe, inſtead of diſcountenancing this popular odium againſt a trade ſo beneficial to the publick, ſeems, on the contrary, to have authoriſed and encouraged it.

BY the 5th and 6th of Edward VI. cap. 14. it was enacted, That whoever ſhould buy any corn or grain with intent to ſell it again, ſhould be reputed an unlawful engroſſer, and ſhould, for the firſt fault, ſuffer two months impriſonment, and forfeit the value of the corn; for the ſecond, ſuffer ſix months impriſon⯑ment, and forfeit double the value; and for the third, be ſet in the pillory, ſuffer impriſonment during the king's pleaſure, and forfeit all his goods and chattels. The antient policy of moſt other parts of Europe was no better than that of England.

[112] OUR anceſtors ſeem to have imagined that the people would buy their corn cheaper of the farmer than of the corn merchant, who, they were afraid, would require, over and above the price which he paid to the farmer, an exorbitant profit to himſelf. They endeavoured, therefore, to annihilate his trade altogether. They even endeavoured to hinder as much as poſſible any middle man of any kind from coming in between the grower and the conſumer; and this was the meaning of the many reſtraints which they impoſed upon the trade of thoſe whom they called kidders or carries of corn, a trade which nobody was allowed to exerciſe without a licence aſcertaining his qualifications as a man of probity and fair dealing. The authority of three juſtices of the peace was, by the ſtatute of Edward VI. neceſſary, in order to grant this licence. But even this reſtraint was afterwards thought inſufficient, and by a ſtatute of Elizabeth, the privilege of granting it was confined to the quarter-ſeſſions.

THE antient policy of Europe endeavoured in this manner to regulate agriculture, the great trade of the country, by maxims quite different from thoſe which it eſtabliſhed with regard to ma⯑nufactures, the great trade of the towns. By leaving the farmer no other cuſtomers but either the conſumer or his immediate factors, the kidders and carriers of corn, it endeavoured to force him to exerciſe the trade, not only of a farmer, but of a corn merchant or corn retailer. On the contrary, it in many caſes prohibited the manufacturer from exerciſing the trade of a ſhop⯑keeper, or from ſelling his own goods by retail. It meant by the one law to promote the general intereſt of the country, or to ren⯑der corn cheap, without, perhaps, its being well underſtood how this was to be done. By the other it meant to promote that of a particular order of men, the ſhopkeepers, who would be ſo [113] much underſold by the manufacturer, it was ſuppoſed, that their trade would be ruined if he was allowed to retail at all.

THE manufacturer, however, though he had been allowed to keep a ſhop, and to ſell his own goods by retail, could not have underſold the common ſhopkeeper. Whatever part of his capital he might have placed in his ſhop, he muſt have withdrawn it from his manufacture. In order to carry on his buſineſs on a level with that of other people, as he muſt have had the profit of a manufacturer on the one part, ſo he muſt have had that of a ſhopkeeper upon the other. Let us ſuppoſe, for example, that in the particular town where he lived, ten per cent. was the ordi⯑nary profit both of manufacturing and ſhopkeeping ſtock; he muſt in this caſe have charged upon every piece of his own goods which he ſold in his ſhop, a profit of twenty per cent. When he carried them from his workhouſe to his ſhop, he muſt have valued them at the price for which he could have ſold them to a dealer or ſhopkeeper, who would have bought them by wholeſale. If he valued them lower, he loſt a part of the profit of his manu⯑facturing capital. When again he ſold them from his ſhop, unleſs he got the ſame price at which a ſhopkeeper would have ſold them, he loſt a part of the profit of his ſhopkeeping capital. Though he might appear, therefore, to make a double profit upon the ſame piece of goods, yet as theſe goods made ſucceſſively a part of two diſtinct capitals, he made but a ſingle profit upon the whole capital employed about them; and if he made leſs than this profit, he was a loſer, or did not employ his whole capital with the ſame advantage as the greater part of his neighbours.

WHAT the manufacturer was prohibited to do, the farmer was in ſome meaſure enjoined to do; to divide his capital between two different employments; to keep one part of it in his grana⯑ries [114] and ſtack yard, for ſupplying the occaſional demands of the market; and to employ the other in the cultivation of his land. But as he could not afford to employ the latter for leſs than the ordinary profits of farming ſtock, ſo he could as little afford to employ the former for leſs than the ordinary profits of mercantile ſtock. Whether the ſtock which really carried on the buſineſs of the corn merchant belonged to the perſon who was called a farmer, or to the perſon who was called a corn merchant, an equal profit was in both caſes requiſite, in order to indemnify its owner for employing it in this manner; in order to put his buſineſs upon a level with other trades, and in order to hinder him from having an intereſt to change it as ſoon as poſſible for ſome other. The farmer, therefore, who was thus forced to exerciſe the trade of a corn merchant, could not afford to ſell his corn cheaper than any other corn merchant would have been obliged to do in the caſe of a free competition.

THE dealer who can employ his whole ſtock in one ſingle branch of buſineſs, has an advantage of the ſame kind with the workman who can employ his whole labour in one ſingle opera⯑tion. As the latter acquires a dexterity which enables him, with the ſame two hands, to perform a much greater quantity of work; ſo the former acquires ſo eaſy and ready a method of tranſacting his buſineſs, of buying and diſpoſing of his goods, that with the ſame capital he can tranſact a much greater quan⯑tity of buſineſs. As the one can commonly afford his work a good deal cheaper, ſo the other can commonly afford his goods ſome⯑what cheaper than if his ſtock and attention were both employed about a greater variety of objects. The greater part of manu⯑facturers could not afford to retail their own goods ſo cheap as a vigilant and active ſhopkeeper, whoſe ſole buſineſs it was to buy them by wholeſale, and to retail them again. The greater part of farmers could ſtill leſs afford to retail their own corn, or to ſupply [115] the inhabitants of a town, at perhaps four or five miles diſtance from the greater part of them, ſo cheap as a vigilant and active corn merchant, whoſe ſole buſineſs it was to purchaſe corn by wholeſale, to collect it into a great magazine, and to retail it again.

THE law which prohibited the manufacturer from exerciſing the trade of a ſhopkeeper, endeavoured to force this diviſion in the employment of ſtock to go on faſter than it might otherwiſe have done. The law which obliged the farmer to exercife the trade of a corn merchant, endeavoured to hinder it from going on ſo faſt. Both laws were evident violations of natural liberty, and there⯑fore unjuſt; and they were both too as impolitick as they were unjuſt. It is the intereſt of every ſociety, that things of this kind ſhould never either be forced or obſtructed. The man who em⯑ploys either his labour or his ſtock in a greater variety of ways than his ſituation renders neceſſary, can never hurt his neigh⯑bour by underſelling him. He may hurt himſelf, and he gene⯑rally does ſo. Jack of all trades will never be rich, ſays the proverb. But the law ought always to truſt people with the care of their own intereſt, as in their local ſituations they muſt gene⯑rally be able to judge better of it than the legiſlator can do. The law, however, which obliged the farmer to exerciſe the trade of a corn merchant, was by far the moſt pernicious of the two.

IT obſtructed, not only that diviſion in the employment of ſtock which is ſo advantageous to every ſociety, but it obſtructed likewiſe the improvement and cultivation of the land. By oblig⯑ing the farmer to carry on two trades inſtead of one, it forced him to divide his capital into two parts, of which one only could be employed in cultivation. But if he had been at liberty to ſell his whole crop to a corn merchant as faſt as he could threſh it out, [116] his whole capital might have returned immediately to the land, and have been employed in buying more cattle, and hiring more ſervants, in order to improve and cultivate it better. But by being obliged to ſell his corn by retail, he was obliged to keep a great part of his capital in his granaries and ſtack yard through the year, and could not, therefore, cultivate ſo well as with the ſame capital he might otherwiſe have done. This law, therefore, neceſſarily obſtructed the improvement of the land, and, inſtead of tending to render corn cheaper, muſt have tended to render it ſcarcer, and therefore dearer, than it would otherwiſe have been.

AFTER the buſineſs of the farmer, that of the corn merchant is in reality the trade which, if properly protected and encou⯑raged, would contribute the moſt to the raiſing of corn. It would ſupport the trade of the farmer in the ſame manner as the trade of the wholeſale dealer ſupports that of the manu⯑facturer.

THE wholeſale dealer, by affording a ready market to the ma⯑nufacturer, by taking his goods off his hand as faſt as he can make them, and by ſometimes even advancing their price to him before he has made them, enables him to keep his whole capital, and ſometimes even more than his whole capital, conſtantly em⯑ployed in manufacturing, and conſequently to manufacture a much greater quantity of goods than if he was obliged to diſ⯑poſe of them himſelf to the immediate conſumers, or even to the retailers. As the capital of the wholeſale merchant too is ge⯑nerally ſufficient to replace that of many manufacturers, this in⯑tercourſe between him and them intereſts the owner of a large capital to ſupport the owners of a great number of ſmall ones, and to aſſiſt them in thoſe loſſes and misfortunes which might otherwiſe prove ruinous to them.

[117] AN intercourſe of the ſame kind univerſally eſtabliſhed between the farmers and the corn merchants, would be attended with effects equally beneficial to the farmers. They would be enabled to keep their whole capitals, and even more than their whole capitals, conſtantly employed in cultivation. In caſe of any of thoſe accidents, to which no trade is more liable than theirs, they would find in their ordinary cuſtomer, the wealthy corn merchant, a perſon who had both an intereſt to ſupport them, and the ability to do it, and they would not, as at preſent, be entirely dependent upon the forbearance of their landlord, or the mercy of his ſteward. Were it poſſible, as perhaps it is not, to eſtabliſh this intercourſe univerſally, and all at once, were it poſ⯑ſible to turn all at once the whole farming ſtock of the kingdom to its proper buſineſs, the cultivation of land, withdrawing it from every other employment into which any part of it may be at preſent diverted, and were it poſſible, in order to ſupport and aſſiſt upon occaſion the operations of this great ſtock, to provide all at once another ſtock almoſt equally great, it is not perhaps very eaſy to imagine how great, how extenſive, and how ſudden would be the improvement which this change of circumſtances would alone produce upon the whole face of the country.

THE ſtatute of Edward VI. therefore, by prohibiting as much as poſſible any middle man from coming in between the grower and the conſumer, endeavoured to annihilate a trade of which the free exerciſe is not only the beſt palliative of the inconveniencies of a dearth, but the beſt preventative of that calamity: after the trade of the farmer, no trade contributing ſo much to the grow⯑ing of corn as that of the corn merchant.

THE rigour of this law was afterwards ſoftened by ſeveral ſubſequent ſtatutes, which ſucceſſively permitted the engroſſing of corn when the price of wheat ſhould not exceed twenty, twenty⯑four, thirty-two, and forty ſhillings the quarter. At laſt, by the [118] 15th of Charles II. c. 7. the engroſſing or buying of corn in order to ſell it again, as long as the price of wheat did not exceed forty-eight ſhillings the quarter, and that of other grain in pro⯑portion, was declared lawful to all perſons not being foreſtallers, that is, not ſelling again in the ſame market within three months. All the freedom which the trade of the inland corn dealer has ever yet enjoyed, was beſtowed upon it by this ſtatute. The ſtatute of the twelfth of the preſent king, which repeals almoſt all the other antient laws againſt engroſſers and foreſtallers, does not repeal the reſtrictions of this particular ſtatute, which there⯑fore ſtill continue in force.

THIS ſtatute, however, authorizes in ſome meaſure two very abſurd popular prejudices.

FIRST, it ſuppoſes that when the price of wheat has riſen ſo high as forty-eight ſhillings the quarter, and that of other grain in proportion, corn is likely to be ſo engroſſed as to hurt the people. But from what has been already ſaid, it ſeems evident enough that corn can at no price be ſo engroſſed by the inland dealers as to hurt the people; and forty-eight ſhillings the quarter beſides, though it may be conſidered as a very high price, yet in years of ſcarcity it is a price which frequently takes place immediately after harveſt, when ſcarce any part of the new crop can be ſold off, and when it is impoſſible even for ignorance to ſuppoſe that any part of it can be ſo engroſſed as to hurt the people.

SECONDLY, it ſuppoſes that there is a certain price at which corn is likely to be foreſtalled, that is, bought up in order to be ſold again ſoon after in the ſame market, ſo as to hurt the people. But if a mer⯑chant ever buys up corn, either going to a particular market or in a particular market, in order to ſell it again ſoon after in the ſame mar⯑ket, [119] it muſt be becauſe he judges that the market cannot be ſo libe⯑rally ſupplied through the whole ſeaſon as upon that particular occa⯑ſion, and that the price, therefore, muſt ſoon riſe. If he judges wrong in this, and if the price does not riſe, he not only loſes the whole profit of the ſtock which he employs in this manner, but a part of the ſtock itſelf, by the expence and loſs which neceſſarily attends the ſtoring and keeping of corn. He hurts himſelf, therefore, much more eſſentially than he can hurt even the particular people whom he may hinder from ſupplying themſelves upon that particu⯑lar market day, becauſe they may afterwards ſupply themſelves juſt as cheap upon any other market day. If he judges right, inſtead of hurting the great body of the people, he renders them a moſt im⯑portant ſervice. By making them feel the inconveniencies of a dearth ſomewhat earlier than they otherwiſe might do, he prevents their feeling them afterwards ſo ſeverely as they certainly would do, if the cheapneſs of price encouraged them to conſume faſter than ſuited the real ſcarcity of the ſeaſon. When the ſoarcity is real, the beſt thing that can be done for the people is to divide the inconveniencies of it as equally as poſſible through all the diffe⯑rent months, and weeks, and days of the year. The intereſt of the corn merchant makes him ſtudy to do this as exactly as he can; and as no other perſon can have either the ſame intereſt, or the ſame knowledge, or the ſame abilities to do it ſo exactly as he, this moſt important operation of commerce ought to be truſted entirely to him; or, in other words, the corn trade, ſo far at leaſt as concerns the ſupply of the home market, ought to be left per⯑fectly free.

THE popular fear of engroſſing and foreſtalling may be com⯑pared to the popular terrors and ſuſpicions of witchcraft. The unfortunate wretches accuſed of this latter crime were not more innocent of the misfortunes imputed to them, than thoſe who [120] have been accuſed of the former. The law which put an end to all proſecutions againſt witchcraft, which put it out of any man's power to gratify his own malice by accuſing his neighbour of that imaginary crime, ſeems effectually to have put an end to thoſe fears and ſuſpicions, by taking away the great cauſe which encouraged and ſupported them. The law which ſhould reſtore entire freedom to the inland trade of corn, would probably prove as effectual to put an end to the popular fears of engroſſing and foreſtalling.

THE 15th of Charles II. c. 7. however, with all its imperfec⯑tions, has perhaps contributed more both to the plentiful ſupply of the home market, and to the increaſe of tillage, than any other law in the ſtatute book. It is from this law that the inland corn trade has derived all the liberty and protection which it has ever yet enjoyed; and both the ſupply of the home market, and the inte⯑reſt of tillage, are much more effectually promoted by the inland, than either by the importation or exportation trade.

THE proportion of the average quantity of all ſorts of grain imported into Great Britain to that of all ſorts of grain conſumed, it has been computed by the author of the tracts upon the corn trade, does not exceed that of one to five hundred and ſeventy. For ſupplying the home market, therefore, the importance of the inland trade muſt be to that of the importation trade as five hun⯑dred and ſeventy to one.

THE average quantity of all ſorts of grain exported from Great Britain does not, according to the ſame author, exceed the one and thirtieth part of the annual produce. For the encouragement of tillage, therefore, by providing a market for the home produce, the importance of the inland trade muſt be to that of the exportation trade as thirty to one.

[121] I HAVE no great faith in political arithmetick, and I mean not to warrant the exactneſs of either of theſe computations. I men⯑tion them only in order to ſhow of how much leſs conſequence, in the opinion of the moſt judicious and experienced perſons, the fo⯑reign trade of corn is than the home trade. The great cheapneſs of corn in the years immediately preceeding the eſtabliſhment of the bounty, may perhaps, with reaſon, be aſcribed in ſome meaſure to the operation of this ſtatute of Charles II. which had been en⯑acted about five and twenty years before, and which had there⯑fore full time to produce its effect.

A VERY few words will ſufficiently explain all that I have to ſay concerning the other three branches of the corn trade.

II. THE trade of the merchant importer of foreign corn for home conſumption, evidently contributes to the immediate ſupply of the home market, and muſt ſo far be immediately beneficial to the great body of the people. It tends, indeed, to lower ſomewhat the average money price of corn, but not to diminiſh its real value, or the quantity of labour which it is capable of maintaining. If importation was at all times free, our farmers and country gentle⯑men would, probably, one year with another, get leſs money for their corn than they do at preſent, when importation is at moſt times in effect prohibited; but the money which they got would be of more value, would buy more goods of all other kinds, and would employ more labour. Their real wealth, their real revenue, therefore, would be the ſame as at preſent, though it might be expreſſed by a ſmaller quantity of ſilver; and they would neither be diſabled nor diſcouraged from cultivating corn as much as they do at preſent. On the contrary, as the riſe in the real value of ſil⯑ver, in conſequence of lowering the money price of corn, lowers ſomewhat the money price of all other commodities, it gives the [122] induſtry of the country where it takes place ſome advantage in all foreign markets, and thereby tends to encourage and increaſe that induſtry. But the extent of the home market for corn muſt be in proportion to the general induſtry of the country where it grows, or to the number of thoſe who produce ſomething elſe, and there⯑fore have ſomething elſe, or what comes to the ſame thing, the price of ſomething elſe, to give in exchange for corn. But in every country the home market, as it is the neareſt and moſt conve⯑nient, ſo is it likewiſe the greateſt and moſt important market for corn. That riſe in the real value of ſilver, therefore, which is the effect of lowering the average money price of corn, tends to en⯑large the greateſt and moſt important market for corn, and thereby to encourage, inſtead of diſcouraging, its growth.

BY the 22d of Charles II. c. 13. the importation of wheat, whenever the price in the home market did not exceed fifty-three ſhillings and four pence the quarter, was ſubjected to a duty of ſixteen ſhillings the quarter; and to a duty of eight ſhillings whenever the price did not exceed four pounds. The former of theſe two prices has, for more than a century paſt, taken place only in times of very great ſcarcity; and the latter has, ſo far as I know, not taken place at all. Yet, till wheat had riſen above this latter price, it was by this ſtatute ſubjected to a very high duty; and, till it had riſen above the former, to a duty which amounted to a prohibition. The importation of other ſorts of grain was reſtrained by duties proportionably high.

THE diſtreſs which, in years of ſcarcity, the ſtrict execution of this ſtatute might have brought upon the people, would probably have been very great. But, upon ſuch occaſions, its execution was generally ſuſpended by temporary ſtatutes, which permitted, for a limited time, the importation of foreign corn. The neceſſity of [123] theſe temporary ſtatutes ſufficiently demonſtrates the impropriety of this general one.

THESE reſtraints upon importation, though prior to the eſta⯑bliſhment of the bounty, were dictated by the ſame ſpirit, by the ſame principles, which afterwards enacted that regulation. How hurtful ſoever in themſelves, theſe or ſome other reſtraints upon importation became neceſſary in conſequence of that regulation. If, when wheat was either below forty-eight ſhillings the quarter, or not much above it, foreign corn could have been imported either duty free, or upon paying only a ſmall duty, it might have been exported again, with the benefit of the bounty, to the great loſs of the publick revenue, and to the intire perverſion of the inſtitution, of which the object was to extend the market for the home growth, not that for the growth of foreign countries.

III. THE trade of the merchant exporter of corn for foreign conſumption, certainly does not contribute directly to the plen⯑tiful ſupply of the home market. It does ſo, however, indirectly. From whatever ſource this ſupply may be uſually drawn, whether from home growth or from foreign importation, unleſs more corn is either uſually grown, or uſually imported into the country, than what is uſually conſumed in it, the ſupply of the home market can never be very plentiful. But, unleſs the ſurplus can, in all ordinary caſes, be exported, the growers will be careful never to grow more, and the importers never to import more, than what the bare conſumption of the home market requires. That market will very ſeldom be overſtocked; but it will generally be under⯑ſtocked, the people, whoſe buſineſs it is to ſupply it, being gene⯑rally afraid leſt their goods ſhould be left upon their hands. The prohibition of exportation limits the improvement and culti⯑vation of the country to what the ſupply of its own inhabitants [124] requires. The freedom of exportation enables it to extend its cul⯑tivation for the ſupply of foreign nations.

BY the 12th of Charles II. c. 4. the exportation of corn was permitted whenever the price of wheat did not exceed forty ſhil⯑lings the quarter, and that of other grain in proportion. By the 15th of the ſame prince this liberty was extended till the price of wheat exceeded forty-eight ſhillings the quarter; and by the 22d, to all higher prices. A poundage, indeed, was to be paid to the king upon ſuch exportation. But all grain was rated ſo low in the book of rates, that this poundage amounted only upon wheat to a ſhilling, upon oats to four-pence, and upon all other grain to ſixpence the quarter. By the 1ſt of William and Mary, the act which eſtabliſhed the bounty, this ſmall duty was virtually taken off whenever the price of wheat did not exceed forty-eight ſhil⯑lings the quarter; and by the 11th and 12th of William III. c. 20. it was expreſsly taken off at all higher prices.

THE trade of the merchant exporter was in this manner, not only encouraged by a bounty, but rendered much more free than that of the inland dealer. By the laſt of theſe ſtatutes, corn could be engroſſed at any price for exportation; but it could not be en⯑groſſed for inland ſale, except when the price did not exceed forty⯑eight ſhillings the quarter. The intereſt of the inland dealer, how⯑ever, it has already been ſhown, can never be oppoſite to that of the great body of the people. That of the merchant exporter may, and in fact ſometimes is. If, while his own country labours under a dearth, a neighbouring country ſhould be afflicted with a famine, it might be his intereſt to carry corn to the latter country in ſuch quantities as might very much aggravate the calamities of the dearth. The plentiful ſupply of the home market was not the direct object of thoſe ſtatutes; but, under the pretence of encou⯑raging [125] agriculture, to raiſe the money price of corn as high as poſ⯑ſible, and thereby to occaſion, as much as poſſible, a conſtant dearth in the home market. By the diſcouragement of importa⯑tion, the ſupply of that market, even in times of great ſcarcity, was confined to the home growth; and by the encouragement of exportation, when the price was ſo high as forty-eight ſhillings the quarter, that market was not, even in times of conſiderable ſcar⯑city, allowed to enjoy the whole of that growth. The temporary laws, prohibiting for a limited time the exportation of corn, and taking off for a limited time the duties upon its importation, expe⯑dients to which Great Britain has been obliged ſo frequently to have recourſe, ſufficiently demonſtrate the impropriety of her general ſyſtem. Had that ſyſtem been good, ſhe would not ſo frequently have been reduced to the neceſſity of departing from it.

WERE all nations to follow the liberal ſyſtem of free exporta⯑tion and free importation, the different ſtates into which a great continent was divided would ſo far reſemble the different provinces of a great empire. As among the different provinces of a great empire the freedom of the inland trade appears, both from reaſon and experience, not only the beſt palliative of a dearth, but the moſt effectual preventative of a famine; ſo would the freedom of the exportation and importation trade be among the different ſtates into which a great continent was divided. The larger the conti⯑nent, the eaſier the communication through all the different parts of it, both by land and by water, the leſs would any one particu⯑lar part of it ever be expoſed to either of theſe calamities, the ſcarcity of any one country being more likely to be relieved by the plenty of ſome other. But very few countries have entirely adopted this liberal ſyſtem. The freedom of the corn trade is almoſt every where more or leſs reſtrained, and, in many countries, is confined by ſuch abſurd regulations, as frequently aggravate the unavoidable misfortune of a dearth into the dreadful calamity of a famine. [126] The demand of ſuch countries for corn may frequently become ſo great and ſo urgent, that a ſmall ſtate in their neighbourhood, which happened at the ſame time to be labouring under ſome de⯑gree of dearth, could not venture to ſupply them without expoſing itſelf to the like dreadful calamity. The very bad policy of one country may thus render it in ſome meaſure dangerous and impru⯑dent to eſtabliſh what would otherwiſe be the beſt policy in ano⯑ther. The unlimited freedom of exportation, however, would be much leſs dangerous in great ſtates, in which the growth being much greater, the ſupply could ſeldom be much affected by any quantity of corn that was likely to be exported. In a Swiſs can⯑ton, or in ſome of the little ſtates of Italy, it may, perhaps, ſome⯑times be neceſſary to reſtrain the exportation of corn. In ſuch great countries as France or England it ſcarce ever can. To hin⯑der, beſides, the farmer from ſending his goods at all times to the beſt market, is evidently to ſacrifice the ordinary laws of juſtice to an idea of public utility, to a ſort of reaſons of ſtate; an act of legi⯑ſlative authority which ought to be exerciſed only, which can be pardoned only in caſes of the moſt urgent neceſſity. The price at which the exportation of corn is prohibited, if it is ever to be prohibited, ought always to be a very high price.

THE laws concerning corn may every where be compared to the laws concerning religion. The people feel themſelves ſo much inte⯑reſted in what relates either to their ſubſiſtence in this life, or to their happineſs in a life to come, that government muſt yield to their prejudices, and, in order to preſerve the public tranquillity, eſta⯑bliſh that ſyſtem which they approve of. It is upon this account, perhaps, that we ſo ſeldom find a reaſonable ſyſtem eſtabliſhed with regard to either of thoſe two capital objects.

IV. THE trade of the merchant carrier, or of the importer of foreign corn, in order to export it again, contributes to the [127] plentiful ſupply of the home market. It is not indeed the direct purpoſe of his trade to ſell his corn there. But he will generally be willing to do ſo, and even for a good deal leſs money than he might expect in a foreign market; becauſe he ſaves in this manner the expence of loading and unloading, of freight and inſurance. The inhabitants of the country which, by means of the carrying trade, becomes the magazine and ſtorehouſe for the ſupply of other countries, can very ſeldom be in want them⯑ſelves. Though the carrying trade might thus contribute to reduce the average money price of corn in the home market, it would not thereby lower its real value. It would only raiſe ſome⯑what the real value of ſilver.

THE carrying trade was in effect prohibited in Great Britain upon all ordinary occaſions, by the high duties upon the im⯑portation of foreign corn; and upon extraordinary occaſions, when a ſcarcity made it neceſſary to ſuſpend thoſe duties by tem⯑porary ſtatutes, exportation was always prohibited. By this ſyſtem of laws, therefore, the carrying trade was in effect prohibited upon all occaſions.

THAT ſyſtem of laws, therefore, which is connected with the eſtabliſhment of the bounty, ſeems to deſerve no part of the praiſe which has been beſtowed upon it. The improvement and proſperity of Great Britain, which has been ſo often aſcribed to thoſe laws, may very eaſily be accounted for by other cauſes. That ſecurity which the laws in Great Britain give to every man that he ſhall enjoy the fruits of his own labour, is alone ſufficient to make any country flouriſh, notwithſtanding theſe and twenty other abſurd regulations of commerce; and this ſecurity was perfected by the revolution, much about the ſame time that the bounty was eſtabliſhed. The natural effort of every individual [128] to better his own condition, when ſuffered to exert itſelf with freedom and ſecurity, is ſo powerful a principle that it is alone, and without any aſſiſtance, not only capable of carrying on the ſociety to wealth and proſperity, but of ſurmounting a hundred impertinent obſtructions with which the folly of human laws too often incumbers its operations; though the effect of theſe ob⯑ſtructions is always more or leſs either to encroach upon its free⯑dom, or to diminiſh its ſecurity. In Great Britain induſtry is perfectly ſecure; and though it is far from being perfectly free, it is as free or freer than in any other part of Europe.

THOUGH the period of the greateſt proſperity and improve⯑ment of Great Britain, has been poſterior to that ſyſtem of laws which is connected with the bounty, we muſt not upon that account impute it to thoſe laws. It has been poſterior likewiſe to the national debt. But the national debt has moſt aſſuredly not been the cauſe of it.

THOUGH the ſyſtem of laws which is connected with the bounty, has exactly the ſame tendency with the police of Spain and Portugal; to lower ſomewhat the value of the precious metals in the country where it takes place; yet Great Britain is certainly one of the richeſt countries in Europe, while Spain and Portugal are perhaps among the moſt beggarly. This difference of ſituation, however, may eaſily be accounted for from two dif⯑ferent cauſes. Firſt, the tax in Spain, the prohibition in Portu⯑gal of exporting gold and ſilver, and the vigilant police which watches over the execution of thoſe laws, muſt, in two very poor countries, which between them import annually upwards of ſix millions ſterling, operate, not only more directly, but much more forcibly in reducing the value of thoſe metals there, than the corn laws can do in Great Britain. And, ſecondly, this bad policy is not in thoſe countries counter-balanced by the general [129] liberty and ſecurity of the people. Induſtry is there neither free nor ſecure, and the civil and eccleſiaſtical governments of both Spain and Portugal, are ſuch as would alone be ſufficient to per⯑petuate their preſent ſtate of poverty, even though their regula⯑tions of commerce were as wiſe as the greater part of them are abſurd and fooliſh.

THE 13th of the preſent king, c. 43. ſeems to have eſtabliſhed a new ſyſtem with regard to the corn laws, in many reſpects better than the ancient one, but in one reſpect perhaps not quite ſo good.

BY this ſtatute the high duties upon importation for home conſumption are taken off as ſoon as the price of wheat is ſo high as forty-eight ſhillings the quarter, and inſtead of them a ſmall duty is impoſed of only ſixpence upon the quarter of wheat, and upon that of other grain in proportion. The home market is in this manner not ſo totally excluded from foreign ſupplies as it was before.

BY the ſame ſtatute the old bounty of five ſhillings upon the quarter of wheat ceaſes when the price riſes ſo high as forty⯑four ſhillings, and upon that of other grain in proportion. The bounties too upon the coarſer ſorts of grain are reduced ſome⯑what lower than they were before, even at the prices at which they take place. If bounties are as improper as I have en⯑deavoured to prove them to be, the ſooner they ceaſe and the lower they are, ſo much the better.

THE ſame ſtatute permits at all prices the importation of corn in order to be exported again, duty free; provided it is in the meantime lodged in the king's warehouſe. This liberty indeed extends to no more than twenty-five of the different ports of [130] Great Britain. They are, however, the principal ones, and there may not perhaps be warehouſes proper for this purpoſe in the greater part of the others. Some proviſion is thus made for the eſtabliſhment of the carrying trade.

So far this law ſeems evidently an improvement upon the antient ſyſtem.

BUT by the ſame law exportation is prohibited as ſoon as the price of wheat riſes to forty-four ſhillings the quarter, and that of other grain in proportion. The price ſeems to be a good deal too low, and there ſeems to be an impropriety beſides in ſtopping ex⯑portation altogether, at the very ſame price at which that bounty which was given in order to force it, is withdrawn. The bounty ought certainly either to have been withdrawn at a much lower price, or exportation ought to have been allowed at a much higher. So far, therefore, this law ſeems to be inferior to the ancient ſyſtem.

CHAP. VI. Of treaties of commerce.

WHEN a nation binds itſelf by treaty either to permit the entry of certain goods from one foreign country which it prohibits from all others, or to exempt the goods of one coun⯑try from duties to which it ſubjects thoſe of all others, the country, or at leaſt the merchants and manufacturers of the country, whoſe commerce is ſo favoured, muſt neceſſarily derive [131] great advantage from the treaty. Thoſe merchants and manufac⯑turers enjoy a ſort of monopoly in the country which is ſo indul⯑gent to them. That country becomes a market both more ex⯑tenſive and more advantageous for their goods: more extenſive, becauſe the goods of other nations being either excluded or ſub⯑jected to heavier duties, it takes off a greater quantity of theirs: more advantageous, becauſe the merchants of the favoured coun⯑try, enjoying a ſort of monopoly there, will often ſell their goods for a better price than if expoſed to the free competition of all other nations.

SUCH treaties, however, though they may be advantageous to the merchants and manufacturers of the favoured, are neceſſarily diſadvantageous to thoſe of the favouring country. A monopoly is thus granted againſt them to a foreign nation; and they muſt frequently buy the foreign goods they have occaſion for dearer than if the free competition of other nations was admitted. That part of its own produce with which ſuch a nation purchaſes foreign goods, muſt conſequently be ſold cheaper, becauſe when two things are ex⯑changed for one another, the cheapneſs of the one is a neceſſary conſequence, or rather is the ſame thing with the dearneſs of the other. The exchangeable value of its annual produce, therefore, is likely to be diminiſhed by every ſuch treaty. This diminution, however, can ſcarce amount to any poſitive loſs, but only to a leſſening of the gain which it might otherwiſe make. Though it ſells its goods cheaper than it otherwiſe might do, it will not probably ſell them for leſs than they coſt; nor, as in the caſe of bounties, for a price which will not replace the capital employed in bringing them to market, together with the ordinary profits of ſtock. The trade could not go on long if it did. Even the favouring coun⯑try, therefore, may ſtill gain by the trade, though leſs than if there was a free competition.

[132] SOME treaties of commerce, however, have been ſuppoſed ad⯑vantageous upon principles very different from theſe; and a com⯑mercial country has ſometimes granted a monopoly of this kind againſt itſelf to certain goods of a foreign nation, becauſe it expected that in the whole commerce between them, it would annually ſell more than it would buy, and that a balance in gold and ſilver would be annually returned to it. It is upon this principle that the treaty of commerce between England and Por⯑tugal, concluded in 1703 by Mr. Methuen, has been ſo much commended. The following is a literal tranſlation of that treaty, which conſiſts of three articles only.

BY this treaty the crown of Portugal becomes bound to admit the Engliſh woollens upon the ſame footing as before the prohi⯑bition, that is, not to raiſe the duties which had been paid before that time. But it does not become bound to admit them upon any better terms than thoſe of any other nation, of France or Holland, for example. The crown of Great Britain, on the contrary, becomes bound to admit the wines of Portugal, upon paying only two-thirds of the duty, which is paid for thoſe of France, the wines moſt likely to come into competition with them. So far this treaty, therefore, is evidently advantageous to Portu⯑gal, and diſadvantageous to Great Britain.

IT has been celebrated, however, as a maſter-piece of the commercial policy of England. Portugal receives annually from the Brazils a greater quantity of gold than can be employed in its domeſtick commerce, whether in the ſhape of coin or of plate. The ſurplus is too valuable to be allowed to lie idle and locked up in coffers, and as it can find no advantageous market at home, it muſt, notwithſtanding any prohibition, be ſent abroad and exchanged for ſomething for which there is a more advan⯑tageous market at home. A large ſhare of it comes annually to England, in return either for Engliſh goods, or for thoſe of other [134] European nations that receive their returns through England. Mr. Baretti was informed that the weekly packet-boat from Liſbon brings, one week with another, more than fifty thouſand pounds in gold to England. The ſum had probably been exag⯑gerated. It would amount to more than two millions ſix hun⯑dred thouſand pounds a year, which is more than the Brazils are ſuppoſed to afford.

OUR merchants were ſome years ago out of humour with the crown of Portugal. Some privileges which had been granted them, not by treaty, but by the free grace of that crown, at the ſolicitation, indeed, it is probable, and in return for much greater favours, defence and protection, from the crown of Great Britain, had been either infringed or revoked. The people, therefore, uſually moſt intereſted in celebrating the Portugal trade, were then rather diſpoſed to repreſent it as leſs advantageous than it had commonly been imagined. The far greater part, almoſt the whole, they pretended, of this annual importation of gold, was not on account of Great Britain, but of other European nations; the fruits and wines of Portugal annually imported into Great Britain nearly compenſating the value of the Britiſh goods ſent thither.

LET us ſuppoſe, however, that the whole was on account of Great Britain, and that it amounted to a ſtill greater ſum than Mr. Baretti ſeems to imagine: this trade would not, upon that account, be more advantageous than any other in which for the ſame value ſent out, we received an equal value of conſum⯑able goods in return.

IT is but a very ſmall part of this importation which, it can be ſuppoſed, is employed as an annual addition either to the plate or to the coin of the kingdom. The reſt muſt all be ſent abroad and [135] exchanged for conſumable goods of ſome kind or other. But if thoſe conſumable goods were purchaſed directly with the produce of Engliſh induſtry, it would be more for the advantage of England than firſt to purchaſe with that produce the gold of Portugal, and afterwards to purchaſe with that gold thoſe conſumable goods. A direct foreign trade of conſumption is always more advantageous than a round-about one; and to bring the ſame value of foreign goods to the home market, requires a much ſmaller capital in the one than in the other. If a ſmaller ſhare of its induſtry, there⯑fore, had been employed in producing goods fit for the Portugal market, and a greater in producing thoſe fit for the other markets where thoſe conſumable goods for which there is a demand in Great Britain are to be had, it would have been more for the advantage of England. To procure both the gold, which it wants for its own uſe, and the conſumable goods, would, in this way, employ a much ſmaller capital than at preſent. There would be a ſpare capital, therefore, to be employed for other purpoſes, in exciting an additional quantity of induſtry, and in raiſing a greater annual produce.

THOUGH Britain were entirely excluded from the Portugal trade, it could find very little difficulty in procuring all the annual ſup⯑plies of gold which it wants, either for the purpoſes of plate, or of coin, or of foreign trade. Gold, like every other commodity, is always ſomewhere or another to be got for its value by thoſe who have that value to give for it. The annual ſurplus of gold in Por⯑tugal, beſides, would ſtill be ſent abroad, and, though not carried away by Great Britain, would be carried away by ſome other nation, which would be glad to ſell it again for its price, in the ſame man⯑ner as Great Britain does at preſent. In buying gold of Portu⯑gal, indeed, we buy it at the firſt hand; whereas, in buying it of any other nation, except Spain, we ſhould buy it at the ſecond, [136] and might pay ſomewhat dearer. This difference, however, would ſurely be too inſignificant to deſerve the publick attention.

ALMOST all our gold, it is ſaid, comes from Portugal. With other nations the balance of trade is either againſt us, or not much in our favour. But we ſhould remember, that the more gold we import from one country, the leſs we muſt neceſſarily import from all others. The effectual demand for gold, like that for every other commodity, is in every country limited to a certain quan⯑tity. If nine-tenths of this quantity are imported from one coun⯑try, there remains a tenth only to be imported from all others. The more gold beſides that is annually imported from ſome parti⯑cular countries, over and above what is requiſite for plate and for coin, the more muſt neceſſarily be exported to ſome others; and the more, that moſt inſignificant object of modern policy, the ba⯑lance of trade, appears to be in our favour with ſome particular countries, the more it muſt neceſſarily appear to be againſt us with many others.

IT was upon this ſilly notion, however, that England could not ſubſiſt without the Portugal trade, that, towards the end of the late war, France and Spain, without pretending either offence or provocation, required the king of Portugal to exclude all Bri⯑tiſh ſhips from his ports, and for the ſecurity of this excluſion, to receive into them French or Spaniſh garriſons. Had the king of Portugal ſubmitted to thoſe ignominious terms which his brother-in-law the king of Spain propoſed to him, Britain would have been freed from a much greater inconveniency than the loſs of the Portugal trade, the burden of ſupporting a very weak ally, ſo unprovided of every thing for his own defence, that the whole power of England, had it been directed to that ſingle purpoſe, could ſcarce perhaps have defended him for another [137] campaign. The loſs of the Portugal trade would, no doubt, have occaſioned a conſiderable embarraſſment to the merchants at that time engaged in it, who might not, perhaps, have found out, for a year or two, any other equally advantageous method of employing their capitals; and in this would probably have conſiſted all the inconveniency which England could have ſuffered from this notable piece of commercial policy.

THE great annual importation of gold and ſilver is neither for the purpoſe of plate nor of coin, but of foreign trade. A round⯑about foreign trade of conſumption can be carried on more advan⯑tageouſly by means of theſe metals than of almoſt any other goods. As they are the univerſal inſtruments of commerce, they are more readily received in return for all commodities than any other goods; and on account of their ſmall bulk and great value, it coſts leſs to tranſport them backward and forwards from one place to another than almoſt any other ſort of merchandize, and they loſe leſs of their value by being ſo tranſported. Of all the commodities, therefore, which are bought in one foreign country, for no other purpoſe but to be ſold or exchanged again for ſome other goods in another, there are none ſo convenient as gold and ſilver. In facilitating all the different round-about foreign trades of conſumption which are carried on in Great Britain, conſiſts the principal advantage of the Portugal trade; and though it is not a capital advantage, it is, no doubt, a conſiderable one.

THAT any annual addition which, it can reaſonably be ſup⯑poſed, is made either to the plate or to the coin of the kingdom, could require but a very ſmall annual importation of gold and ſilver, ſeems evident enough; and, though we had no direct trade with Portugal, this ſmall quantity could always, ſomewhere or another, be very eaſily got.

THOUGH the goldſmiths trade be very conſiderable in Great Bri⯑tain, the far greater part of the new plate which they annually [138] ſell, is made from other old plate melted down; ſo that the addi⯑tion annually made to the whole plate of the kingdom cannot be very great, and could require but a very ſmall annual importation.

IT is the ſame caſe with the coin. Nobody imagines, I believe, that even the greater part of the annual coinage, amounting, for ten years together before the late reformation of the gold coin, to up⯑wards of eight hundred thouſand pounds a year in gold, was an annual addition to the money before current in the kingdom. In a country where the expence of the coinage is defrayed by the govern⯑ment, the value of the coin, even when it contains its full ſtandard weight of gold and ſilver, can never be much greater than that of an equal quantity of thoſe metals uncoined; becauſe it requires only the trouble of going to the mint, and the delay perhaps of a few weeks, to procure for any quantity of uncoined gold and ſilver an equal quantity of thoſe metals in coin. But, in every country, the greater part of the current coin is almoſt always more or leſs worn, or otherwiſe degenerated from its ſtandard. In Great Britain it was, before the late reformation, a good deal ſo, the gold being more than two per cent. and the ſilver more than eight per cent. below its ſtand⯑ard weight. But if forty-four guineas and a half, containing their full ſtandard weight, a pound weight of gold, could purchaſe very little more than a pound weight of uncoined gold, forty-four guineas and a half wanting a part of their weight could not pur⯑chaſe a pound weight, and ſomething was to be added in order to make up the deficiency. The current price of gold bullion at market, therefore, inſtead of being the ſame with the mint price, or 461. 14s. 6d. was then about 471. 14s. and ſometimes about forty⯑eight pounds. When the greater part of the coin, however, was in this degenerate condition, forty-four guineas and a half, freſh from the mint, would purchaſe no more goods in the market than any other ordinary guineas, becauſe when they come into the cof⯑fers of the merchant, being confounded with other money, they [139] could not afterwards be diſtinguiſhed without more trouble than the difference was worth. Like other guineas they were worth no more than 461. 14s. 6d. If thrown into the melting pot, how⯑ever, they produced, without any ſenſible loſs, a pound weight of ſtandard gold, which could be ſold at any time for between 471. 14s. and 481. either in gold or ſilver, as fit for all the purpoſes of coin as that which had been melted down. There was an evident pro⯑fit, therefore, in melting down new coined money, and it was done ſo inſtantaneouſly, that no precaution of government could prevent it. The operations of the mint were, upon this account, ſomewhat like the web of Penelope; the work that was done in the day was undone in the night. The mint was employed, not ſo much in making daily additions to the coin, as in replacing the very beſt part of it which was daily melted down.

WERE the private people, who carry their gold and ſilver to the mint, to pay themſelves for the coinage, it would add to the value of thoſe metals in the ſame manner as the faſhion does to that of plate. Coined gold and ſilver would be more valuable than uncoined. The ſeignorage, if it was not exorbitant, would add to the bullion the whole value of the duty; becauſe, the government having every where the excluſive privilege of coining, no coin can come to market cheaper than they think proper to afford it. If the duty was exorbitant indeed, that is, if it was very much above the real value of the labour and expence requiſite for coinage, falſe coiners, both at home and abroad, might be encouraged, by the great difference between the value of bullion and that of coin, to pour in ſo great a quantity of counterfeit money as might reduce the value of the government money. In France, however, though the ſeignorage is eight per cent. no ſenſible inconveniency of this kind is found to ariſe from it. The dangers to which a falſe coiner is every where expoſed, if he lives in the country of which he coun⯑terfeits [140] the coin, and to which his agents or correſpondents are expoſed if he lives in a foreign country, are by far too great to be incurred for the ſake of a profit of ſix or ſeven per cent.

THE ſeignorage in France raiſes the value of the coin higher than in proportion to the quantity of pure gold which it contains. Thus by the edict of January, 1726, ^* the mint price of fine gold of twenty-four carats was fixed at ſeven hundred and forty livres, nine ſous and one denier one-eleventh, the mark of eight Paris ounces. The gold coin of France, making an allowance for the remedy of the mint, contains twenty-one carats and three-fourths of fine gold, and two carats one-fourth of alloy. The mark of ſtandard gold, therefore, is worth no more than about ſix hundred and ſeventy-one livres ten deniers. But in France this mark of ſtandard gold is coined into thirty Louis d' ors of twenty-four livres each, or into ſeven hundred and twenty livres. The coinage, therefore, increaſes the value of a mark of ſtandard gold bullion, by the difference between ſix hundred and ſeventy-one livres ten deniers and ſeven hundred and twenty livres; or by forty-eight livres, nineteen ſous, and two deniers.

A SEIGNORAGE will, in many caſes, take away altogether, and will, in all caſes, diminiſh the profit of melting down the new coin. This profit always ariſes from the difference between the quan⯑tity of bullion which the common currency ought to contain, and that which it actually does contain. If this difference is leſs than the ſeignorage, there will be loſs inſtead of profit. If it is equal to the ſeignorage, there will neither be profit nor loſs. If it is greater than the ſeignorage, there will indeed be ſome profit, but [141] leſs than if there was no ſeignorage. If, before the late reforma⯑tion of the gold coin, for example, there had been a ſeignorage of five per cent. upon the coinage, there would have been a loſs of three per cent. upon the melting down of the gold coin. If the ſeignorage had been two per cent. there would have been neither profit nor loſs. If the ſeignorage had been one per cent. there would have been a profit, but of one per cent. only inſtead of two per cent. Wherever money is received by tale, therefore, and not by weight, a ſeignorage is the moſt effectual preventative of the melting down of the coin, and, for the ſame reaſon, of its expor⯑tation. It is the beſt and heavieſt pieces that are commonly either melted down or exported; becauſe it is upon ſuch that the largeſt profits are made.

THE law for the encouragement of the coinage, by rendering it duty-free, was firſt enacted, during the reign of Charles II. for a limited time; and afterwards continued, by different prolongations, till 1769, when it was rendered perpetual. The bank of England, in order to repleniſh their coffers with money, are fre⯑quently obliged to carry bullion to the mint; and it was more for their intereſt, they probably imagined, that the coinage ſhould be at the expence of the government, than at their own. It was, probably, out of complaiſance to this great company that the go⯑vernment agreed to render this law perpetual. Should the cuſtom of weighing gold, however, come to be difuſed, as it is very likely to be on account of its inconveniency; ſhould the gold coin of England come to be received by tale, as it was before the late re⯑coinage, this great company may, perhaps, find that they have upon this, as upon ſome other occaſions, miſtaken their own inte⯑reſt not a little.

BEFORE the late re-coinage, when the gold currency of Eng⯑land was two per cent. below its ſtandard weight, as there was [142] no ſeignorage, it was two per cent. below the value of that quantity of ſtandard gold bullion which it ought to have con⯑tained. When this great company, therefore, bought gold bul⯑lion in order to have it coined, they were obliged to pay for it two per cent. more than it was worth after the coinage. But if there had been a ſeignorage of two per cent. upon the coinage, the common gold currency, though two per cent. below its ſtand⯑ard weight, would notwithſtanding have been equal in value to the quantity of ſtandard gold which it ought to have contained; the value of the faſhion compenſating in this caſe the diminution of the weight. They would indeed have had the ſeignorage to pay, which being two per cent. their loſs upon the whole tranſ⯑action would have been two per cent. exactly the ſame, but no greater than it actually was.

IF the ſeignorage had been five per cent. and the gold cur⯑rency only two per cent. below its ſtandard weight, the bank would in this caſe have gained three per cent. upon the price of the bullion; but as they would have had a ſeignorage of five per cent. to pay upon the coinage, their loſs upon the whole tranſac⯑tion would, in the ſame manner, have been exactly two per cent.

In the ſeignorage had been only one per cent. and the gold currency two per cent. below its ſtandard weight, the bank would in this caſe have loſt only one per cent. upon the price of the bullion; but as they would likewiſe have had a ſeignorage of one per cent. to pay, their loſs upon the whole tranſaction would have been exactly two per cent. in the ſame manner as in all other caſes.

IF there was a reaſonable ſeignorage, while at the ſame time the coin contained its full ſtandard weight, as it has done very [143] nearly ſince the late re-coinage, whatever the bank might loſe by the ſeignorage, they would gain upon the price of the bullion; and whatever they might gain upon the price of the bullion, they would loſe by the ſeignorage. They would neither loſe nor gain, therefore, upon the whole tranſaction, and they would in this, as in all the foregoing caſes, be exactly in the ſame ſituation as if there was no ſeignorage.

WHEN the tax upon a commodity is ſo moderate as not to encourage ſmuggling, the merchant, who deals in it, though he advances, does not properly pay the tax, as he gets it back in the price of the commodity. The tax is finally paid by the laſt purchaſer or conſumer. But money is a commodity with regard to which every man is a merchant. Nobody buys it but in order to ſell it again; and with regard to it there is in ordinary caſes no laſt purchaſer or conſumer. When the tax upon coin⯑age, therefore, is ſo moderate as not to encourage falſe coin⯑ing, though every body advances the tax, nobody finally pays it; becauſe every body gets it back in the advanced value of the coin.

A MODERATE ſeignorage, therefore, would not in any caſe augment the expence of the bank, or of any other private per⯑ſons who carry their bullion to the mint in order to be coined, and the want of a moderate ſeignorage does not in any caſe dimi⯑niſh it. Whether there is or is not a ſeignorage, if the currency contains its full ſtandard weight, the coinage coſts nothing to any body, and if it is ſhort of that weight, the coinage muſt always coſt the difference between the quantity of bullion which ought to be contained in it, and that which actually is con⯑tained in it.

THE government, therefore, when it defrays the expence of coinage, not only incurrs ſome ſmall expence, but loſes ſome [144] ſmall revenue which it might get by a proper duty; and neither the bank nor any other private perſons are in the ſmalleſt degree benefited by this uſeleſs piece of public generoſity.

THE directors of the bank, however, would probably be unwilling to agree to the impoſition of a ſeignorage upon the authority of a ſpeculation which promiſes them no gain, but only pretends to in⯑ſure them from any loſs. In the preſent ſtate of the gold coin, and as long as it continues to be received by weight, they cer⯑tainly would gain nothing by ſuch a change. But if the cuſtom of weighing the gold coin ſhould ever go into difuſe, as it is very likely to do, and if the gold coin ſhould ever fall into the ſame ſtate of degradation in which it was before the late re-coinage, the gain, or more properly the ſavings of the bank, in conſequence of the impoſition of a ſeignorage, would probably be very conſi⯑derable. The bank of England is the only company which ſends any conſiderable quantity of bullion to the mint, and the bur⯑den of the annual coinage falls entirely or almoſt entirely upon it. If this annual coinage had nothing to do but to repair the unavoidable loſſes and neceſſary tear and wear of the coin, it could ſeldom exceed fifty thouſand or at moſt a hundred thouſand pounds. But when the coin is degraded below its ſtandard weight, the annual coinage muſt, beſides this, fill up the large vacuities which exportation and the melting pot are continually making in the current coin. It was upon this account that dur⯑ing the ten or twelve years immediately preceeding the late refor⯑mation of the gold coin, the annual coinage amounted at an average to more than eight hundred and fifty thouſand pounds. But if there had been a ſeignorage of four or five per cent. upon the gold coin, it would probably, even in the ſtate in which things then were, have put an effectual ſtop to the buſineſs both of exportation and of the melting pot. The bank, inſtead of loſing [145] every year about two and a half per cent. upon the bullion which was to be coined into more than eight hundred and fifty thouſand pounds, or incurring an annual loſs of more than twenty one thouſand two hundred and fifty pounds, would not probably have incurred the tenth part of that loſs.

THE revenue allotted by parliament for defraying the expence of the coinage is but fourteen thouſand pounds a year, and the real expence which it coſts the government, or the fees of the officers of the mint, do not upon ordinary occaſions, I am aſſured, exceed the half of that ſum. The ſaving of ſo very ſmall a ſum, or even the gaining of another which could not well be much larger, are objects too inconſiderable, it may be thought, to deſerve the ſerious attention of government. But the ſaving of eighteen or twenty thouſand pounds a year in caſe of an event which is not improbable, which has frequently hap⯑pened before, and which is very likely to happen again, is ſurely an object which well deſerves the ſerious attention even of ſo great a company as the bank of England.

SOME of the foregoing reaſonings and obſervations might per⯑haps have been more properly placed in thoſe chapters of the firſt book which treat of the origin and uſe of money, and of the difference between the real and the nominal price of com⯑modities. But as the law for the encouragement of coinage de⯑rives its origin from thoſe vulgar prejudices which have been in⯑troduced by the mercantile ſyſtem; I judged it more proper to reſerve them for this chapter. Nothing could be more agreeable to the ſpirit of that ſyſtem than a ſort of bounty upon the pro⯑duction of money, the very thing which, it ſuppoſes, conſtitutes the wealth of every nation. It is one of its many admirable ex⯑pedients for enriching the country.

CHAP. VII. Of Colonies.

CHAP. VIII. Of the agricultural Syſtems, or of thoſe Syſtems of political Oeconomy which repreſent the Produce of Land as either the ſole or the principal Source of the Revenue and Wealth of every Country.

THE agricultural ſyſtems of political oeconomy will not require ſo long an explanation as that which I have thought it neceſſary to beſtow upon the mercantile or commercial ſyſtem.

THAT ſyſtem which repreſents the produce of land as the ſole ſource of the revenue and wealth of every country, has, ſo far as I know, never been adopted by any nation, and it at preſent exiſts only in the ſpeculations of a few men of great learning and inge⯑nuity in France. It would not, ſurely, be worth while to examine at great length the errors of a ſyſtem which never has done, and probably never will do any harm in any part of the world. I ſhall endeavour to explain, however, as diſtinctly as I can, the great outlines of this very ingenious ſyſtem.

MR. Colbert, the famous miniſter of Lewis XIVth, was a man of probity, of great induſtry and knowledge of detail; of great experience and acuteneſs in the examination of publick accounts, and of abilities, in ſhort, every way fitted for introducing method [257] and good order into the collection and expenditure of the publick revenue. That miniſter had unfortunately embraced all the preju⯑dices of the mercantile ſyſtem. That ſyſtem, in its nature and eſſence a ſyſtem of reſtraint and regulation, could ſcarce fail to be agreeable to a laborious and plodding man of buſineſs, who had been accuſtomed to regulate the different departments of publick offices, and to eſtabliſh the neceſſary checks and controuls for confining each to its proper ſphere. The induſtry and commerce of a great country he endeavoured to regulate upon the ſame model as the departments of a publick office; and inſtead of allowing every man to purſue his own intereſt his own way, upon the liberal plan of equality, liberty and juſtice, he beſtowed upon certain branches of induſtry extraordinary privileges, while he laid others under as extraordinary reſtraints. He was not only diſpoſed, like other European miniſters, to encourage more the induſtry of the towns than that of the country, but in order to ſupport the induſtry of the towns, he was willing even to depreſs and keep down that of the country. In order to render proviſions cheap to the inhabitants of the towns, and thereby to encourage manufactures and foreign commerce, he prohibited altogether the exportation of corn, and thus excluded the inhabitants of the country from every foreign market for by far the moſt important part of the produce of their induſtry. This prohibition, joined to the reſtraints impoſed by the antient provincial laws of France upon the tranſportation of corn from one province to another, and to the arbitrary and degrading taxes which are levied upon the cultivators in almoſt all the provinces, diſcouraged and kept down the agriculture of that country very much below the ſtate to which it would naturally have riſen in ſo very fertile a ſoil and ſo very happy a climate. This ſtate of diſcouragement and depreſſion was felt more or leſs in every different part of the country, and many different enquiries were ſet on foot concerning the cauſes of it. One of thoſe cauſes [258] appeared to be the preference given, by the inſtitutions of Mr. Colbert, to the induſtry of the towns above that of the country.

IF the rod be bent too much one way, ſays the proverb, in order to make it ſtraight you muſt bend it as much the other. The French philoſophers, who have propoſed the ſyſtem which repreſents agriculture as the ſole ſource of the revenue and wealth of every country, ſeem to have adopted this proverbial maxim; and as in the plan of Mr. Colbert the induſtry of the towns was certainly over-valued in compariſon with that of the country; ſo in their ſyſtem it ſeems to be as certainly under-valued.

THE different orders of people who have ever been ſuppoſed to contribute in any reſpect towards the annual produce of the land and labour of the country, they divide into three claſſes. The firſt is the claſs of the proprietors of land. The ſecond is the claſs of the cultivators, of farmers and country labourers, whom they honour with the peculiar appellation of the productive claſs. The third is the claſs of artificers, manufacturers and merchants, whom they endeavour to degrade by the humiliating appellation of the barren or unproductive claſs.

THE claſs of proprietors contributes to the annual produce by the expence which they may occaſionally lay out upon the improve⯑ment of the land, upon the buildings, drains, encloſures and other ameliorations, which they may either make or maintain upon it, and by means of which the cultivators are enabled, with the ſame capital, to raiſe a greater produce, and conſequently to pay a greater rent. This advanced rent may be conſidered as the intereſt or profit due to the proprietor upon the expence or capital which he thus employs in the improvement of his land. Such expences are in this ſyſtem called ground expences (depenſes foncieres).

[259] THE cultivators or farmers contribute to the annual produce by what are in this ſyſtem called the original and annual expences (depenſes primitives et depenſes annuelles) which they lay out upon the cultivation of the land. The original expences conſiſt in the inſtruments of huſbandry, in the ſtock of cattle, in the ſeed, and in the maintenance of the farmer's family, ſervants and cattle, during at leaſt a great part of the firſt year of his occu⯑pancy, or till he can receive ſome return from the land. The annual expences conſiſt in the ſeed, in the tear and wear of the inſtruments of huſbandry, and in the annual maintenance of the farmer's ſervants and cattle, and of his family too, ſo far as any part of them can be conſidered as ſervants employed in cultiva⯑tion. That part of the produce of the land which remains to him after paying the rent, ought to be ſufficient, firſt, to replace to him within a reaſonable time, at leaſt during the term of his occupancy, the whole of his original expences, together with the ordinary profits of ſtock; and, ſecondly, to replace to him an⯑nually the whole of his annual expences, together likewiſe with the ordinary profits of ſtock. Thoſe two ſorts of expences are two capitals which the farmer employs in cultivation; and unleſs they are regularly reſtored to him, together with a reaſonable profit, he cannot carry on his employment upon a level with other employments; but, from a regard to his own intereſt, muſt deſert it as ſoon as poſſible, and ſeek ſome other employ⯑ment. That part of the produce of the land which is thus ne⯑ceſſary for enabling the farmer to continue his buſineſs, ought to be conſidered as a fund ſacred to cultivation, which if the land⯑lord violates, he neceſſarily degrades the produce of his own land, and in a few years not only diſables the farmer from paying this racked rent, but from paying the reaſonable rent which he might otherwiſe have got for his land. The rent which properly belongs to the landlord, is no more than the neat produce which remains [260] after paying in the compleateſt manner all the neceſſary expences which muſt be previouſly laid out in order to raiſe the groſs, or the whole produce. It is becauſe the labour of the cultivators, over and above paying compleatly all thoſe neceſſary expences, affords a neat produce of this kind, that this claſs of people are in this ſyſtem peculiarly diſtinguiſhed by the honourable appellation of the productive claſs. Their original and annual expences are for the ſame reaſon called, in this ſyſtem, productive expences, becauſe, over and above replacing their own value, they occaſion the annual reproduction of this neat produce.

THE ground expences, as they are called, or what the land⯑lord lays out upon the improvement of his land, are in this ſyſtem too honoured with the appellation of productive expences. Till the whole of thoſe expences, together with the ordinary profits of ſtock, have been compleatly repaid to him by the ad⯑vanced rent which he gets from his land, that advanced rent ought to be regarded as ſacred and inviolable, both by the church and by the king; ought to be ſubject neither to tithe nor to taxa⯑tion. If it is otherwiſe, by diſcouraging the improvement of land, the church diſcourages the future increaſe of her own tithes, and the king the future increaſe of his own taxes. As in a well ordered ſtate of things, therefore, thoſe ground expences, over and above reproducing in the compleateſt manner their own value, occaſion likewiſe after a certain time a reproduction of a neat produce, they are in this ſyſtem conſidered as productive expences.

THE ground expences of the landlord, however, together with the original and the annual expences of the farmer, are the only three ſorts of expences which in this ſyſtem are conſidered as pro⯑ductive. All other expences and all other orders of people, even thoſe who in the common apprehenſions of men are regarded as [261] the moſt productive, are in this account of things repreſented as altogether barren and unproductive.

ARTIFICERS and manufacturers, in particular, whoſe induſtry, in the common apprehenſions of men, increaſes ſo much the value of the rude produce of land, are in this ſyſtem repreſented as a claſs of people altogether barren and unproductive. Their labour, it is ſaid, replaces only the ſtock which employs them, together with its ordinary profits. That ſtock conſiſts in the ma⯑terials, tools, and wages, advanced to them by their employer; and is the fund deſtined for their employment and maintenance. Its profits are the fund deſtined for the maintenance of their em⯑ployer. Their employer, as he advances to them the ſtock of materials, tools and wages neceſſary for their employment, ſo he advances to himſelf what is neceſſary for his own maintenance, and this maintenance he generally proportions to the profit which he expects to make by the price of their work. Unleſs its price repays to him the maintenance which he advances to himſelf, as well as the materials, tools and wages which he advances to his workmen, it evidently does not repay him the whole expence which he lays out upon it. The profits of manufacturing ſtock, therefore, are not, like the rent of land, a neat produce which remains after compleatly repaying the whole expence which muſt be laid out in order to obtain them. The ſtock of the farmer yields him a profit as well as that of the maſter manufacturer; and it yields a rent likewiſe to another perſon, which that of the maſter manufacturer does not. The expence, therefore, laid out in employing and maintaining artificers and manufacturers, does no more than continue, if one may ſay ſo, the exiſtence of its own value, and does not produce any new value. It is therefore altogether a barren and unproductive expence. The expence, on the contrary, laid out in employing farmers and country [262] labourers, over and above continuing the exiſtence of its own value, produces a new value, the rent of the landlord. It is there⯑fore a productive expence.

MERCANTILE ſtock is equally barren and unproductive with manufacturing ſtock. It only continues the exiſtence of its own value, without producing any new value. Its profits are only the repayment of the maintenance which its employer advances to himſelf during the time that he employs it, or till he receives the returns of it. They are only the repayment of a part of the expence which muſt be laid out in employing it.

THE labour of artificers and manufacturers never adds any thing to the value of the whole annual amount of the rude produce of the land. It adds indeed greatly to the value of ſome particular parts of it. But the conſumption which in the mean time it occaſions of other parts, is preciſely equal to the value which it adds to thoſe parts; ſo that the value of the whole amount is not, at any one moment of time, in the leaſt augmented by it. The perſon who works the lace of a pair of fine ruffles, for example, will ſometimes raiſe the value of perhaps a pennyworth of flax to thirty pounds ſterling. But though at firſt ſight he appears thereby to multiply the value of a part of the rude produce about ſeven thouſand and two hundred times, he in reality adds nothing to the value of the whole annual amount of the rude produce. The working of that lace coſts him perhaps two years labour. The thirty pounds which he gets for it when it is finiſhed, is no more than the repay⯑ment of the ſubſiſtence which he advances to himſelf during the two years that he is employed about it. The value which, by every day's, month's, or year's labour, he adds to the flax, does no more than replace the value of his own conſumption during that day, month, or year. At no moment of time, therefore, does he add [263] any thing to the value of the whole annual amount of the rude produce of the land: the portion of that produce which he is continually conſuming, being always equal to the value which he is continually producing. The extream poverty of the greater part of the perſons employed in this expenſive, though trifling manufacture, may ſatisfy us that the price of their work does not in ordinary caſes exceed the value of their ſubſiſtence. It is otherwiſe with the work of farmers and country labourers. The rent of the landlord is a value, which, in ordinary caſes, it is con⯑tinually producing, over and above replacing, in the moſt compleat manner, the whole conſumption, the whole expence laid out upon the employment and maintenance both of the workmen and of their employer.

ARTIFICERS, manufacturers and merchants, can augment the revenue and wealth of their ſociety, by parſimony only; or, as it is ex⯑preſſed in this ſyſtem, by privation, that is, by depriving themſelves of a part of the funds deſtined for their own ſubſiſtence. They annually reproduce nothing but thoſe funds. Unleſs, therefore, they annually ſave ſome part of them, unleſs they annually deprive themſelves of the enjoyment of ſome part of them, the revenue and wealth of their ſociety can never be in the ſmalleſt degree augmented by means of their induſtry. Farmers and country labourers, on the contrary, may enjoy compleatly the whole funds deſtined for their own ſubſiſtence, and yet augment at the ſame time the revenue and wealth of their ſociety. Over and above the funds deſtined for their own ſubſiſtence, their induſtry annually affords a neat produce, of which the augmentation neceſſarily augments the revenue and wealth of their ſociety. Nations, therefore, which, like France or England, conſiſt in a great meaſure of proprietors and cultivators, can be enriched by induſtry and enjoyment. Nations, on the contrary, which, like Holland and Hamburgh, are compoſed chiefly of merchants, artificers and manufacturers, can grow rich [264] only through parſimony and privation. As the intereſt of nations ſo differently circumſtanced is very different, ſo is likewiſe the com⯑mon character of the people. In thoſe of the former kind libera⯑lity, frankneſs, and good fellowſhip, naturally make a part of that common character. In the latter, narrowneſs, meanneſs, and a ſelfiſh diſpoſition, averſe to all ſocial pleaſure and enjoyment.

THE unproductive claſs, that of merchants, artificers, and manu⯑facturers, is maintained and employed altogether at the expence of the two other claſſes, of that of proprietors, and of that of culti⯑vators. They furniſh it both with the materials of its work and with the fund of its ſubſiſtence, with the corn and cattle which it conſumes while it is employed about that work. The proprietors and cultivators finally pay both the wages of all the workmen of the unproductive claſs, and the profits of all their employers. Thoſe workmen and their employers are properly the ſervants of the proprietors and cultivators. They are only ſervants who work without doors, as menial ſervants work within. Both the one and the other, however, are equally maintained at the expence of the ſame maſters. The labour of both is equally unproductive. It adds nothing to the value of the ſum total of the rude produce of the land. Inſtead of increaſing the value of that ſum total, it is a charge and expence which muſt be paid out of it.

THE unproductive claſs, however, is not only uſeful, but greatly uſeful to the other two claſſes. By means of the induſtry of mer⯑chants, artificers, and manufacturers, the proprietors and cultiva⯑tors can purchaſe both the foreign goods and the manufactured produce of their own country which they have occaſion for, with the produce of a much ſmaller quantity of their own labour than what they would be obliged to employ if they were to attempt, in an aukward and unſkilful manner, either to import the one or to [265] make the other for their own uſe. By means of the unproductive claſs, the cultivators are delivered from many cares which would otherwiſe diſtract their attention from the cultivation of land. The ſuperiority of produce which, in conſequence of this undivided attention, they are enabled to raiſe, is fully ſufficient to pay the whole expence which the maintenance and employment of the unproductive claſs coſts either the proprietors, or themſelves. The induſtry of merchants, artificers, and manufacturers, though in its own nature altogether unproductive, yet contributes in this manner indirectly to increaſe the produce of the land. It increaſes the productive powers of productive labour, by leaving it at liberty to confine itſelf to its proper employment, the cultiva⯑tion of land; and the plough goes frequently the eaſier and the better by means of the labour of the man whoſe buſineſs is moſt remote from the plough.

IT can never be the intereſt of the proprietors and cultivators to reſtrain or to diſcourage in any reſpect the induſtry of mer⯑chants, artificers and manufacturers. The greater the liberty which this unproductive claſs enjoys, the greater will be the com⯑petition in all the different trades which compoſe it, and the cheaper will the other two claſſes be ſupplied both with foreign goods, and with the manufactured produce of their own country.

IT can never be the intereſt of the unproductive claſs to oppreſs the other two claſſes. It is the ſurplus produce of the land, or what remains after deducting the maintenance, firſt, of the cultiva⯑tors, and afterwards of the proprietors, that maintains and employs the unproductive claſs. The greater this ſurplus the greater muſt likewiſe be its maintenance and employment. The eſtabliſhment of perfect juſtice, of perfect liberty, and of perfect equality, is the [266] very ſimple ſecret which moſt effectually ſecures the higheſt degred of proſperity to all the three claſſes.

THE merchants, artificers, and manufacturers of thoſe mercantile ſtates which, like Holland and Hamburgh, conſiſt chiefly of this unproductive claſs, are in the ſame manner maintained and em⯑ployed altogether at the expence of the proprietors and cultivators of land. The only difference is, that thoſe proprietors and culti⯑vators are, the greater part of them, placed at a moſt inconvenient diſtance from the merchants, artificers, and manufacturers whom they ſupply with the materials of their work and the fund of their ſubſiſtence, are the inhabitants of other countries, and the ſubjects of other governments.

SUCH mercantile ſtates, however, are not only uſeful, but greatly uſeful to the inhabitants of thoſe other countries. They fill up, in ſome meaſure, a very important void, and ſupply the place of the merchants, artificers and manufacturers, whom the inhabitants of thoſe countries ought to find at home, but whom, from ſome defect in their policy, they do not find at home.

IT can never be the intereſt of thoſe landed nations, if I may call them ſo, to diſcourage or diſtreſs the induſtry of ſuch mercantile ſtates, by impoſing high duties upon their trade, or upon the commodities which they furniſh. Such duties, by rendering thoſe commodities dearer, could ſerve only to ſink the real value of the ſurplus produce of their own land, with which, or, what comes to the ſame thing, with the price of which thoſe commodities are purchaſed. Such duties could ſerve only to diſcourage the increaſe of that ſurplus produce, and conſequently the improvement and cultivation of their own land. The moſt effectual expedient, on the contrary, for raiſing the value of that ſurplus produce, for [267] encouraging its increaſe, and conſequently the improvement and cultivation of their own land, would be to allow the moſt perfect freedom to the trade of all ſuch mercantile nations.

THIS perfect freedom of trade would even be the moſt effectual expedient for ſupplying them, in due time, with all the artificers, manufacturers and merchants, whom they wanted at home, and for filling up in the propereſt and moſt advantageous manner that very important void which they felt there.

THE continual increaſe of the ſurplus produce of their land, would, in due time, create a greater capital than what could be employed with the ordinary rate of profit in the improvement and cultivation of land; and the ſurplus part of it would naturally turn itſelf to the employment of artificers and manufacturers at home. But thoſe artificers and manufacturers, finding at home, both the materials of their work and the fund of their ſubſiſtence, might immediately, even with much leſs art and ſkill, be able to work as cheap as the like artificers and manufacturers of ſuch mercantile ſtates, who had both to bring from a great diſtance. Even though, from want of art and ſkill, they might not for ſome time be able to work as cheap, yet, finding a market at home, they might be able to ſell their work there as cheap as that of the artificers and manufacturers of ſuch mercantile ſtates, which could not be brought to that market but from ſo great a diſtance; and as their art and ſkill improved, they would ſoon be able to ſell it cheaper. The artificers and manufacturers of ſuch mercantile ſtates, therefore, would immediately be rivalled in the market of thoſe landed nations, and ſoon after underſold and juſtled out of it altogether. The cheapneſs of the manufacturers of thoſe landed nations, in conſe⯑quence of the gradual improvements of art and ſkill, would, in due time, extend their ſale beyond the home market, and carry [268] them to many foreign markets, from which they would in the ſame manner gradually juſtle out many of the manufactures of ſuch mercantile nations.

THIS continual increaſe both of the rude and manufactured produce of thoſe landed nations would in due time create a greater capital than could, with the ordinary rate of profit, be employed either in agriculture or in manufacturers. The ſurplus of this capital would naturally turn itſelf to foreign trade, and be employed in exporting to foreign countries ſuch parts of the rude and manufactured produce of its own country as exceeded the demand of the home market. In the exportation of the produce of their own country, the merchants of a landed nation would have an advantage of the ſame kind over thoſe of mercantile nations, which its artificers and manufacturers had over the artificers and manufacturers of ſuch nations; the advantage of finding at home that cargo, and thoſe ſtores and provi⯑ſions, which the others were obliged to ſeek for at a diſtance. With inferior art and ſkill in navigation, therefore, they would be able to ſell that cargo as cheap in foreign markets as the merchants of ſuch mercantile nations; and with equal art and ſkill they would be able to ſell it cheaper. They would ſoon, therefore, rival thoſe mercantile nations in this branch of their foreign trade, and in due time would juſtle them out of it altogether.

ACCORDING to this liberal and generous ſyſtem, therefore, the moſt advantageous method in which a landed nation can raiſe up arti⯑ficers, manufacturers and merchants of its own, is to grant the moſt perfect freedom of trade to the artificers, manufacturers and mer⯑chants of all other nations. It thereby raiſes the value of the ſurplus produce of its own land, of which the continual increaſe gradually eſtabliſhes a fund which in due time neceſſarily raiſes up all the [269] artificers, manufacturers and merchants whom it has occaſion for.

WHEN a landed nation, on the contrary, oppreſſes either by high duties or by prohibitions the trade of foreign nations, it neceſ⯑ſarily hurts its own intereſt in two different ways. Firſt, by raiſing the price of all foreign goods and of all ſorts of manufactures, it neceſſarily ſinks the real value of the ſurplus produce of its own land, with which, or, what comes to the ſame thing, with the price of which it purchaſes thoſe foreign goods and manufactures. Secondly, by giving a ſort of monopoly of the home market to its own merchants, artificers and manufacturers, it raiſes the rate of mercantile and manufacturing profit in proportion to that of agricultural profit, and conſequently either draws from agriculture a part of the capital which had before been employed in it, or hinders from going to it a part of what would otherwiſe have gone to it. This policy, therefore, diſcourages agriculture in two different ways; firſt, by ſinking the real value of its produce, and thereby lowering the rate of its profit; and, ſecondly, by raiſing the rate of profit in all other employments. Agriculture is rendered leſs advantageous, and trade and manufactures more advantageous than they other⯑wiſe would be; and every man is tempted by his own intereſt to turn, as much as he can, both his capital and his induſtry from the former to the latter employments.

THOUGH, by this oppreſſive policy, a landed nation ſhould be able to raiſe up artificers, manufacturers and merchants, of its own, ſomewhat ſooner than it could do by the freedom of trade; a matter, however, which is not a little doubtful; yet it would raiſe them up, if one may ſay ſo, prematurely, and before it was perfectly ripe for them. By raiſing up too haſtily one ſpecies of induſtry, it would depreſs another more valuable ſpecies of induſtry. By raiſing [270] up too haſtily a ſpecies of induſtry which only replaces the ſtock which employs it, together with the ordinary profit, it would depreſs a ſpecies of induſtry which, over and above replacing that ſtock with its profit, affords likewiſe a neat produce, a free rent to the landlord. It would depreſs productive labour, by encou⯑raging too haſtily that labour which is altogether barren and unproductive.

IN what manner, according to this ſyſtem, the ſum total of the annual produce of the land is diſtributed among the three claſſes abovementioned, and in what manner the labour of the unpro⯑ductive claſs, does no more than replace the value of its own conſumption, without increaſing in any reſpect the value of that ſum total, is repreſented by Mr. Queſnai, the very ingenious and profound author of this ſyſtem, in ſome arithmetical formularies. The firſt of theſe formularies, which by way of eminence he peculiarly diſtinguiſhes by the name of the Oeconomical Table, repreſents the manner in which he ſuppoſes this diſtribution takes place, in a ſtate of the moſt perfect liberty, and therefore of the higheſt proſperity; in a ſtate where the annual produce is ſuch as to afford the greateſt poſſible neat produce, and where each claſs enjoys its proper ſhare of the whole annual produce. Some ſubſequent formularies repreſent the manner in which, he ſuppoſes, this diſtri⯑bution is made in different ſtates of reſtraint and regulation; in which, either the claſs of proprietors, or the barren and unproductive claſs, is more favoured than the claſs of cultivators, and in which either the one or the other encroaches more or leſs upon the ſhare which ought properly to belong to this productive claſs. Every ſuch encroachment, every violation of that natural diſtribution, which the moſt perfect liberty would eſtabliſh, muſt, according to this ſyſtem, neceſſarily degrade more or leſs from one year to another the value and ſum total of the annual produce, and muſt neceſſarily occaſion [271] a gradual declenſion in the real wealth and revenue of the ſociety; a declenſion of which the progreſs muſt be quicker or ſlower, according to the degree of this encroachment, according as that natural diſtribution, which the moſt perfect liberty would eſtabliſh, is more or leſs violated. Thoſe ſubſequent formularies repreſent the different degrees of declenſion, which, according to this ſyſtem, correſpond to the different degrees in which this natural diſtribution of things is violated.

SOME ſpeculative phyſicians ſeem to have imagined that the health of the human body could be preſerved only by a certain preciſe regimen of diet and exerciſe, of which every the ſmalleſt violation neceſſarily occaſioned ſome degree of diſeaſe or diſorder proportioned to the degree of the violation. Experience, however, would ſeem to ſhow that the human body frequently preſerves, at leaſt to all appearance, the moſt perfect ſtate of health under a vaſt variety of different regimens; even under ſome which are generally believed to be very far from being perfectly wholeſome. But the healthful ſtate of the human body, it would ſeem, contains in itſelf ſome unknown principle of preſervation, capable either of preventing or of correcting, in many reſpects, the bad effects even of a very faulty regimen. Mr. Queſnai, who was himſelf a phyſi⯑cian, and a very ſpeculative phyſician, ſeems to have entertained a notion of the ſame kind concerning the political body, and to have imagined that it would thrive and proſper only under a certain preciſe regimen, the exact regimen of perfect liberty and perfect juſtice. He ſeems not to have conſidered that in the political body, the natural effort which every man is continually making to better his own condition, is a principle of preſervation capable of prevent⯑ing and correcting in many reſpects the bad effects of a political oeconomy in ſome degree both partial and oppreſſive. Such a political oeconomy, though it no doubt retards more or leſs, [272] is not always capable of ſtopping altogether the natural progreſs of a nation towards wealth and proſperity, and ſtill leſs of making it go backwards. If a nation could not proſper without the enjoyment of perfect liberty and perfect juſtice, there is not in the world a nation which could ever have proſpered. In the political body, however, the wiſdom of nature has fortunately made ample proviſion for remedying many of the bad effects of the folly and injuſtice of man; in the ſame manner as it has done in the natural body for remedying thoſe of his ſloth and intem⯑perance.

THE capital error of this ſyſtem, however, ſeems to lie in its repreſenting the claſs of artificers, manufacturers and merchants, as altogether barren and unproductive. The following obſervations may ſerve to ſhow the impropriety of this repreſentation.

FIRST, this claſs, it is acknowledged, reproduces annually the value of its own annual conſumption, and continues, at leaſt, the exiſtence of the ſtock or capital which maintains and employs it. But upon this account alone the denomination of barren or unpro⯑ductive ſhould ſeem to be very improperly applied to it. We ſhould not call a marriage barren or unproductive, though it produced only a ſon and a daughter, to replace the father and mother, and though it did not increaſe the number of the human ſpecies, but only continued it as it was before. Farmers and country labourers, indeed, over and above the ſtock which maintains and employs them, reproduce annually a neat produce, a free rent to the landlord. As a marriage which affords three children is certainly more productive than one which affords only two; ſo the labour of farmers and country labourers is certainly more productive than that of merchants, artificers and manufacturers. The ſupe⯑rior [273] produce of the one claſs, however, does not render the other barren or unproductive.

SECONDLY, it ſeems, upon this account, altogether improper to conſider artificers, manufacturers and merchants, in the ſame light as menial ſervants. The labour of menial ſervants does not conti⯑nue the exiſtence of the fund which maintains and employs them. Their maintenance and employment is altogether at the expence of their maſters, and the work which they perform is not of a nature to repay that expence. That work conſiſts in ſervices which periſh generally in the very inſtant of their performance, and does not fix or realize itſelf in any vendible commodity which can replace the value of their wages and maintenance. The labour, on the contrary, of artificers, manufacturers and merchants, naturally does fix and realize itſelf in ſome ſuch vendible commodity. It is upon this account that, in the chapter in which I treat of productive and unproductive labour, I have claſſed artificers, manufacturers and merchants, among the productive labourers, and menial ſervants among the barren or unproductive.

THIRDLY, it ſeems, upon every ſuppoſition, improper to ſay, that the labour of artificers, manufacturers and merchants, does not increaſe the real revenue of the ſociety. Though we ſhould ſuppoſe, for example, as it ſeems to be ſuppoſed in this ſyſtem, that the value of the daily, monthly, and yearly conſumption of this claſs was exactly equal to that of its daily, monthly, and yearly production, yet it would not from thence follow that its labour added nothing to the real revenue, to the real value of the annual produce of the land and labour of the ſociety. An artificer, for example, who in the firſt ſix months after harveſt, executes ten pounds worth of work, though he ſhould in the ſame time conſume ten pounds worth of corn and other neceſſaries, yet really adds the value of ten pounds to the [274] annual produce of the land and labour of the ſociety. While he has been conſuming a half yearly revenue of ten pounds worth of corn and other neceſſaries, he has produced an equal value of work capable of purchaſing, either to himſelf or to ſome other perſon, an equal half yearly revenue. The value, therefore, of what has been conſumed and produced during theſe ſix months is equal, not to ten, but to twenty pounds. It is poſſible, indeed, that no more than ten pounds worth of this value, may ever have exiſted at any one moment of time. But if the ten pounds worth of corn and other neceſſaries, which were conſumed by the artificer, had been conſumed by a ſoldier or by a menial ſervant, the value of that part of the annual produce which exiſted at the end of the ſix months, would have been ten pounds leſs than it actually is in conſequence of the labour of the artificer. Though the value of what the artificer produces, therefore, ſhould not at any one moment of time be ſuppoſed greater than the value he conſumes, yet at every moment of time the actually exiſting value of goods in the market is, in conſe⯑quence of what he produces, greater than it otherwiſe would be.

WHEN the patrons of this ſyſtem aſſert that the conſumption of artificers, manufacturers and merchants, is equal to the value of what they produce, they probably mean no more than that their revenue, or the fund deſtined for their conſumption, is equal to it. But if they had expreſſed themſelves more accurately, and only aſſerted that the revenue of this claſs was equal to the value of what they produced, it might readily have occurred to the reader that what would naturally be ſaved out of this revenue, muſt neceſſarily increaſe more or leſs the real wealth of the ſociety. In order, therefore, to make out ſomething like an argument, it was neceſſary that they ſhould expreſs themſelves as they have done; and this argument, even ſuppoſing things actually were as it ſeems to preſume them to be, turns out to be a very inconcluſive one.

[275] FOURTHLY, farmers and country labourers can no more aug⯑ment, without parſimony, the real revenue, the annual produce of the land and labour of their ſociety, than artificers, manufac⯑turers and merchants. The annual produce of the land and labour of any ſociety can be augmented only in two ways; either, firſt, by ſome improvement in the productive powers of the uſeful labour actually maintained within it; or, ſecondly, by ſome increaſe in the quantity of that labour.

THE improvement in the productive powers of uſeful labour depend, firſt, upon the improvement in the ability of the work⯑man; and, ſecondly, upon that of the machinery with which he works. But the labour of artificers and manufacturers, as it is capable of being more ſubdivided, and the labour of each workman reduced to a greater ſimplicity of operation than that of farmers and country labourers, ſo it is likewiſe capable of both theſe ſorts of improvement in a much higher degree. ^* In this reſpect, there⯑fore, the claſs of cultivators can have no ſort of advantage over that of artificers and manufacturers.

THE increaſe in the quantity of uſeful labour actually employed within any ſociety, muſt depend altogether upon the increaſe of the capital which employs it; and the increaſe of that capital again muſt be exactly equal to the amount of the ſavings from the revenue either of the particular perſons who manage and direct the employ⯑ment of that capital, or of ſome other perſons who lend it to them. If merchants, artificers and manufacturers are, as this ſyſtem ſeems to ſuppoſe, naturally more inclined to parſimony and ſaving than proprietors and cultivators, they are, ſo far, more likely to aug⯑ment [276] the quantity of uſeful labour employed within their ſociety, and conſequently to increaſe its real revenue, the annual produce of its land and labour.

FIFTHLY and laſtly, though the revenue of the inhabitants of every country was ſuppoſed to conſiſt altogether, as this ſyſtem ſeems to ſuppoſe, in the quantity of ſubſiſtence which their induſtry could procure to them; yet, even upon this ſuppoſition, the revenue of a trading and manufacturing country muſt, other things being equal, always be much greater than that of one without trade or manufactures. By means of trade and manufactures, a greater quantity of ſubſiſtence can be annually imported into a particular country than what its own lands, in the actual ſtate of their culti⯑vation, could afford. The inhabitants of a town, though they fre⯑quently poſſeſs no lands of their own, yet draw to themſelves by their induſtry ſuch a quantity of the rude produce of the lands of other people as ſupplies them, not only with the materials of their work, but with the fund of their ſubſiſtence. What a town always is with regard to the country in its neighbourhood, one inde⯑pendent ſtate or country may frequently be with regard to other independent ſtates or countries. It is thus that Holland draws a great part of its ſubſiſtence from other countries; live cattle from Holſtein and Jutland, and corn from almoſt all the different coun⯑tries of Europe. A ſmall quantity of manufactured produce pur⯑chaſes a great quantity of rude produce. A trading and manufactur⯑ing country, therefore, naturally purchaſes with a ſmall part of its manufactured produce a great part of the rude produce of other coun⯑tries; while, on the contrary, a country without trade and manu⯑factures is generally obliged to purchaſe, at the expence of a great part of its rude produce, a very ſmall part of the manufactured produce of other countries. The one exports what can ſubſiſt and accom⯑modate but a very few, and imports the ſubſiſtence and accommo⯑dation of a great number. The other exports the accommodation [277] and ſubſiſtence of a great number, and imports that of a very few only. The inhabitants of the one muſt always enjoy a much greater quantity of ſubſiſtence than what their own lands, in the actual ſtate of their cultivation, could afford. The inhabitants of the other muſt always enjoy a much ſmaller quantity.

THIS ſyſtem, however, with all its imperfections is, perhaps the neareſt approximation to the truth that has yet been publiſhed upon the ſubject of political oeconomy, and is upon that account well worth the conſideration of every man who wiſhes to examine with attention the principles of that very important ſcience. Though in repreſenting the labour which is employed upon land as the only productive labour, the notions which it inculcates are perhaps too narrow and confined; yet in repreſenting the wealth of nations as conſiſting, not in the unconſumable riches of money, but in the conſumable goods annually reproduced by the labour of the ſociety; and in repreſenting perfect liberty as the only effectual expedient for rendering this annual reproduction the greateſt poſſible, its doctrine ſeems to be in every reſpect as juſt as it is generous and liberal. Its followers are very numerous; and as men are fond of paradoxes, and of appearing to underſtand what ſurpaſſes the comprehenſion of ordinary people, the paradox which it maintains, concerning the unproductive nature of manufacturing labour, has not perhaps contributed a little to increaſe the number of its admirers. They have for ſome years paſt made a pretty conſiderable ſect, diſtinguiſhed in the French republick of letters by the name of, The Oeconomiſts. Their works have certainly been of ſome ſervice to their country; not only by bringing into general diſcuſſion, many ſubjects which had never been well examined before, but by influencing in ſome meaſure the publick adminiſtration in favour of agriculture. It has been in conſequence of their repreſentations, accordingly, that the agriculture of France has been delivered from ſeveral of the [278] oppreſſions which it before laboured under. The term during which ſuch a leaſe can be granted, as will be valid againſt every future purchaſer or proprietor of the land, has been prolonged from nine to twenty-ſeven years. The antient provincial reſtraints upon the tranſportation of corn from one province of the kingdom to another, have been entirely taken away, and the liberty of exporting it to all foreign countries, has been eſtabliſhed as the common law of the kingdom in all ordinary caſes. This ſect, in their works, which are very numerous, and which treat not only of what is properly called Political Oeconomy, or of the nature and cauſes of the wealth of nations, but of every other branch of the ſyſtem of civil government, all follow implicitly, and without any ſenſible variation, the doctrine of Mr. Queſnai. There is upon this account little variety in the greater part of their works. The moſt diſtinct and beſt connected account of this doctrine is to be found in a little book written by Mr. Mercier de la Riviere, ſome⯑time Intendant of Martinico, intitled, The natural and eſſential Order of Political Societies. The admiration of this whole ſect for their maſter, who was himſelf a man of the greateſt modeſty and ſimplicity, is not inferior to that of any of the antient philoſophers for the founders of their reſpective ſyſtems. There have been, ſince the world began, ſays a very diligent and reſpectable author, the Marquis de Mirabeau, three great inventions which have princi⯑pally given ſtability to political ſocieties, independent of many other inventions which have enriched and adorned them. The firſt is the invention of writing, which alone gives human nature the power of tranſmitting without alteration, its laws, its contracts, its annals, and its diſcoveries. The ſecond, is the invention of money, which binds together all the relations between civilized ſocieties. The third, is the Oeconomical Table, the reſult of the other two, which completes them both by perfecting their object; the great diſcovery of our age, but of which our poſterity will reap the benefit.

[279] AS the political oeconomy of the nations of modern Europe, has been more favourable to manufactures and foreign trade, the induſtry of the towns, than to agriculture, the induſtry of the country; ſo that of other nations has followed a different plan, and has been more favourable to agriculture than to manufactures and foreign trade.

THE policy of China favours agriculture more than all other employments. In China, the condition of a labourer is ſaid to be as much ſuperior to that of an artificer; as in moſt parts of Europe, that of an artificer is to that of a labourer. In China, the great ambition of every man is to get poſſeſſion of ſome little bit of land, either in property or in leaſe; and leaſes are there ſaid to be granted upon very moderate terms, and to be ſuffi⯑ciently ſecured to the leſſees. The Chineſe have little reſpect for foreign trade. Your beggarly commerce! was the language in which the Mandarins of Pekin uſed to talk to Mr. Langlet, the Ruſſian envoy, concerning it. Except with Japan, the Chineſe carry on themſelves and in their own bottoms little or no foreign trade; and it is only into one or two ports of their kingdom that they even admit the ſhips of foreign nations. Foreign trade, therefore, is, in China, every way confined within a much nar⯑rower circle than that to which it would naturally extend itſelf, if more freedom was allowed to it, either in their own ſhips, or in thoſe of foreign nations.

MANUFACTURES, as in a ſmall bulk they frequently contain a great value, and can upon that account be tranſported at leſs expence from one country to another than moſt ſorts of rude produce, are in almoſt all countries the principal ſupport of foreign trade. In countries beſides leſs extenſive and leſs favourably circum⯑ſtanced for interior commerce than China, they generally require the ſupport of foreign trade. Without an extenſive foreign market, [280] they could not well flouriſh either in countries ſo moderately exten⯑ſive as to afford but a narrow home market; or in countries where the communication between one province and another was ſo difficult as to render it impoſſible for the goods of any particular place to enjoy the whole of that home market which the country could afford. The perfection of manufacturing induſtry, it muſt be remembered, depends altogether upon the diviſion of labour; and the degree to which the diviſion of labour can be introduced into any manufacture, is neceſſarily regulated, it has already been ſhown, by the extent of the market. But the great extent of the empire of China, the vaſt multitude of its inhabitants, the variety of climate, and conſequently of productions in its different provinces, and the eaſy communication by means of water carriage between the greater part of them, render the home market of that country of ſo great extent, as to be alone ſuffi⯑cient to ſupport very great manufactures, and to admit of very conſiderable ſubdiviſions of labour. The home market of China is perhaps in extent not much inferior to the market of all the different countries of Europe put together. A more extenſive foreign trade, however, which to this great home market added the foreign market of all the reſt of the world; eſpecially if any conſiderable part of this trade was carried on in Chineſe ſhips; could ſcarce fail to increaſe very much the manufactures of China, and to improve very much the productive powers of its manufac⯑turing induſtry. By a more extenſive navigation, the Chineſe would naturally learn the art of uſing and conſtructing themſelves all the different machines made uſe of in other countries, as well as all the other improvements of art and induſtry which are practiſed in all the different parts of the world. Upon their preſent plan they have little opportunity of improving themſelves by the example of any other nation; except that of the Japaneſe.

[281] THE policy of antient Egypt too and that of the Gentoo govern⯑ment of Indoſtan ſeem to have favoured agriculture more than all other employments.

BOTH in antient Egypt and in Indoſtan, the whole body of the people was divided into different caſts or tribes, each of which was confined, from father to ſon, to a particular employment or claſs of employments. The ſon of a prieſt was neceſſarily a prieſt; the ſon of a ſoldier, a ſoldier; the ſon of a labourer, a labourer; the ſon of a weaver, a weaver; the ſon of a taylor, a taylor; &c. In both countries, the caſt of the prieſts held the higheſt rank, and that of the ſoldiers the next; and in both countries, the caſt of the farmers and labourers was ſuperior to the caſts of merchants and manufacturers.

THE government of both countries was particularly attentive to the intereſt of agriculture. The works conſtructed by the antient ſovereigns of Egypt for the proper diſtribution of the waters of the Nile were famous in antiquity; and the ruined remains of ſome of them are ſtill the admiration of travellers. Thoſe of the ſame kind which were conſtructed by the antient ſovereigns of Indoſtan, for the proper diſtribution of the waters of the Ganges as well as of many other rivers, though they have been leſs celebrated, ſeem to have been equally great. Both countries accordingly, though ſubject occaſionally to dearths, have been famous for their great fertility. Though both were extreamly populous, yet in years of moderate plenty they were both able to export great quantities of grain to their neighbours.

THE antient Egyptians had a ſuperſtitious averſion to the ſea; and as the Gentoo religion does not permit its followers to light a fire, nor conſequently to dreſs any victuals upon the water, it in [282] effect prohibits them from all diſtant ſea voyages. Both the Egyptians and Indians muſt have depended almoſt altogether upon the navi⯑gation of other nations for the exportation of their ſurplus produce; and this dependency, as it muſt have confined the market, ſo it muſt have diſcouraged the increaſe of this ſurplus produce. It muſt have diſcouraged too the increaſe of the manufactured produce more than that of the rude produce. Manufactures require a much more extenſive market than the moſt important parts of the rude produce of the land. A ſingle ſhoemaker will make more than three hundred pairs of ſhoes in the year; and his own family will not perhaps wear out ſix pairs. Unleſs therefore he has the cuſtom of at leaſt fifty ſuch families as his own, he cannot diſpoſe of the whole produce of his own labour. The moſt numerous claſs of artificers will ſeldom, in a large country, make more than one in fifty or one in a hundred of the whole number of families contained in it. But in ſuch large countries as France and England, the number of people employed in agriculture has by ſome authors been computed at a half, by others at a third, and by no author that I know of, at leſs than a fifth of the whole inhabitants of the country. But as the produce of the agriculture of both France and England is, the far greater part of it, conſumed at home, each perſon employed in it muſt, according to theſe computations, require little more than the cuſtom of one, two, or at moſt four ſuch families as his own, in order to diſpoſe of the whole produce of his own labour. Agricul⯑ture, therefore, can ſupport itſelf under the diſcouragement of a confined market, much better than manufactures. In both antient Egypt and Indoſtan, indeed, the confinement of the foreign market was in ſome meaſure compenſated by the conveniency of many inland navigations, which opened in the moſt advantageous manner the whole extent of the home market to every part of the produce of every different diſtrict of thoſe countries. The great extent of Indoſtan too rendered the home market of that [283] country very great, and ſufficient to ſupport a great variety of manu⯑factures. But the ſmall extent of antient Egypt, which was never equal to England, muſt at all times have rendered the home market of that country too narrow for ſupporting any great variety of ma⯑nufactures. Bengal, accordingly, the province of Indoſtan which commonly exports the greateſt quantity of rice, has always been more remarkable for the exportation of a great variety of manufac⯑tures, than for that of its grain. Antient Egypt, on the contrary, though it exported ſome manufactures, fine linen in particular, as well as ſome other goods, was always moſt diſtinguiſhed for its great exportation of grain. It was long the granary of the Roman empire.

THE ſovereigns of China, of ancient Egypt, and of the different kingdoms into which Indoſtan has at different times been divided, have always derived the whole, or by far the moſt conſiderable part, of their revenue from ſome ſort of land-tax or land-rent. This land-tax or land-rent, like the tithe in Europe, conſiſted in a certain pro⯑portion, a fifth, it is ſaid, of the produce of the land, which was either delivered in kind or paid in money, according to a certain valua⯑tion, and which therefore varied from year to year according to all the variations of the produce. It was natural, therefore, that the ſovereigns of thoſe countries ſhould be particularly attentive to the intereſts of agriculture, upon the proſperity or declenſion of which immediately depended the yearly increaſe or diminution of their own revenue.

THE policy of the antient republicks of Greece, and that of Rome, though it honoured agriculture more than manufactures or foreign trade, yet ſeems rather to have diſcouraged the latter employ⯑ments, than to have given any direct or intentional encouragement to the former. In ſeveral of the antient ſtates of Greece, foreign trade was prohibited altogether; and in ſeveral others the employ⯑ments [284] of artificers and manufacturers were conſidered as hurtful to the ſtrength and agility of the human body, as rendering it inca⯑pable of thoſe habits which their military and gymnaſtic exerciſes endeavoured to form in it, and as thereby diſqualifying it more or leſs from undergoing the fatigues and encountering the dangers of war. Such occupations were conſidered as fit only for ſlaves, and the free citizens of the ſtate were prohibited from exerciſing them. Even in thoſe ſtates where no ſuch prohibition took place, as in Rome and Athens, the great body of the people were in effect excluded from all the trades which are now commonly exerciſed by the lower ſort of the inhabitants of towns. Such trades were at Athens and Rome all occupied by the ſlaves of the rich, who exerciſed them for the benefit of their maſters, whoſe wealth, power and protection, made it almoſt impoſſible for a poor freeman to find a market for his work when it came into competition with that of the ſlaves of the rich. Slaves, however, are very ſeldom inventive; and all the moſt important improvements, either in machinery, or in that arrange⯑ment and diſtribution of work which facilitate and abridge labour, have been the diſcoveries of freemen. Should a ſlave propoſe any im⯑provement of this kind, his maſter would be very apt to conſider the propoſal as the ſuggeſtion of lazineſs, and of a deſire to ſave his own labour at the maſter's expence. The poor ſlave, inſtead of reward, would probably meet with much abuſe, perhaps with ſome puniſh⯑ment. In the manufactures carried on by ſlaves, therefore, more labour muſt generally have been employed to execute the ſame quantity of work than in thoſe carried on by freemen. The work of the former muſt, upon that account, generally have been dearer than that of the latter. The Hungarian mines, it is remarked by Mr. Monteſ⯑quieu, though not more rich, have always been wrought with leſs expence, and therefore with more profit, than the Turkiſh mines in their neighbourhood. The Turkiſh mines are wrought by ſlaves; and the arms of thoſe ſlaves are the only machines which the Turks have ever thought of employing. The Hungarian [285] mines are wrought by freemen, who employ a good deal of machinery, by which they facilitate and abridge their own labour. From the very little that is known about the price of manufactures in the times of the Greeks and Romans, it would appear that thoſe of the finer ſort were exceſſively dear. Silk ſold for its weight in gold. It was not, indeed, in thoſe times a European manufacture; and as it was all brought from the Eaſt Indies, the diſtance of the carriage may in ſome meaſure account for the greatneſs of the price. The price, however, which a lady, it is ſaid, would ſometimes pay for a piece of very fine linen ſeems to have been equally extravagant; and as linen was always either a European, or, at fartheſt, an Egyptian manufacture, this high price can be accounted for only by the great expence of the labour which muſt have been employed about it, and the expence of this labour again could ariſe from nothing but the aukwardneſs of the machinery which it made uſe of. The price of fine woollens too, though not quite ſo extravagant, ſeems however to have been much above that of the preſent times. Some cloths, we are told by Pliny, dyed in a particular manner, coſt a hundred denarii, or three pounds ſix ſhillings and eight pence, the pound weight. Others dyed in another manner coſt a thouſand denarii the pound weight, or thirty-three pounds ſix ſhillings and eight pence. The Roman pound, it muſt be remembered, contained only twelve of our averdupois ounces. This high price, indeed, ſeems to have been principally owing to the dye. But had not the cloths themſelves been much dearer than any which are made in the preſent times, ſo very expenſive a dye would not probably have been beſtowed upon them. The diſpro⯑portion would have been too great between the value of the acceſ⯑ſory and that of the principal. The price mentioned by the ſame author of ſome Triclinaria, a ſort of woollen pillows or cuſhions made uſe of to lean upon as they reclined upon their couches at table, paſſes all credibility; ſome of them being ſaid to have coſt more than thirty thouſand, others more than three hundred thou⯑ſand [286] pounds. This high price too is not ſaid to have ariſen from the dye. In the dreſs of the people of faſhion of both ſexes, there ſeems to have been much leſs variety, it is obſerved by Doctor Arbuthnot, in antient than in modern times; and the very little variety which we find in that of the antient ſtatues confirms his obſervation. He infers from this, that their dreſs muſt upon the whole have been cheaper than ours: but the concluſion does not ſeem to follow. When the expence of faſhionable dreſs is very great, the variety muſt be very ſmall. But when, by the improvements in the productive powers of manufacturing art and induſtry, the expence of any one dreſs comes to be very moderate, the variety will naturally be very great. The rich, not being able to diſtin⯑guiſh themſelves by the expence of any one dreſs, will naturally endeavour to do ſo by the multitude and variety of their dreſſes.

THE greateſt and moſt important branch of the commerce of every nation, it has already been obſerved, is that which is carried on between the inhabitants of the town and thoſe of the country. The inhabitants of the town draw from the country the rude produce which conſtitutes both the materials of their work and the fund of their ſubſiſtence; and they pay for this rude produce by ſending back to the country a certain portion of it manufactured and prepared for immediate uſe. The trade which is carried on between thoſe two different ſets of people conſiſts ultimately in a certain quantity of rude produce exchanged for a certain quan⯑tity of manufactured produce. The dearer the latter, there⯑fore, the cheaper the former; and whatever tends in any coun⯑try to raiſe the price of manufactured produce, tends to lower that of the rude produce of the land, and thereby to diſcourage agriculture. The ſmaller the quantity of manufactured produce which any given quantity of rude produce, or, what comes to the ſame thing, which the price of any given quantity of rude produce is capable of purchaſing, the ſmaller the real value of that given [287] quantity of rude produce; the ſmaller the encouragement which either the landlord has to increaſe its quantity by improving, or the farmer by cultivating the land. Whatever, beſides, tends to dimi⯑niſh in any country the number of artificers and manufacturers, tends to diminiſh the home market, the moſt important of all markets, for the rude produce of the land, and thereby ſtill further to diſcourage agriculture.

THOSE ſyſtems, therefore, which preferring agriculture to all other employments, in order to promote it impoſe reſtraints upon manufactures and foreign trade, act contrary to the very end which they propoſe, and indirectly diſcourage that very ſpecies of induſtry which they mean to promote. They are ſo far, perhaps, more inconſiſtent than even the mercantile ſyſtem. That ſyſtem, by encouraging manufactures and foreign trade more than agriculture, turns a certain portion of the capital of the ſociety from ſupporting a more advantageous, to ſupport a leſs advantageous ſpecies of induſtry. But ſtill it really and in the end encourages that ſpecies of induſtry which it means to promote. Thoſe agricultural ſyſtems, on the contrary, really and in the end diſcourage their own favourite ſpecies of induſtry.

IT is thus that every ſyſtem which endeavours, either, by extraor⯑dinary encouragements, to draw towards a particular ſpecies of induſtry a greater ſhare of the capital of the ſociety than what would naturally go to it; or, by extraordinary reſtraints, to force from a particular ſpecies of induſtry ſome ſhare of the capital which would otherwiſe be employed in it; is in reality ſubverſive of the great purpoſe which it means to promote. It retards, inſtead of accelerating, the progreſs of the ſociety towards real wealth and greatneſs; and diminiſhes, inſtead of increaſing, the real value of the annual produce of its land and labour.

[289] ALL ſyſtems either of preference or of reſtraint, therefore, being thus completely taken away, the obvious and ſimple ſyſtem of natural liberty eſtabliſhes itſelf of its own accord. Every man, as long as he does not violate the laws of juſtice, is left perfectly free to purſue his own intereſt his own way, and to bring both his induſtry and capital into competition with thoſe of any other man or order of men. The ſovereign is completely diſcharged from a duty, in the attempting to perform which he muſt always be expoſed to innumerable deluſions, and for the proper performance of which no human wiſdom or knowledge could ever be ſufficient; the duty of ſuper-intending the induſtry of private people, and of directing it towards the employments moſt ſuitable to the intereſt of the ſociety. According to the ſyſtem of natural liberty, the ſove⯑reign has only three duties to attend to; three duties of great import⯑ance, indeed, but plain and intelligible to common underſtandings: firſt, the duty of protecting the ſociety from the violence and invaſion of other independent ſocieties; ſecondly, the duty of protecting, as far as poſſible, every member of the ſociety from the injuſtice or oppreſſion of every other member of it, or the duty of eſtabliſhing an exact adminiſtration of juſtice; and, thirdly, the duty of erect⯑ing and maintaining certain publick works and certain publick inſtitutions, which it can never be for the intereſt of any indivi⯑dual, or ſmall number of individuals, to erect and maintain; becauſe the profit could never repay the expence to any individual or ſmall number of individuals, though it may frequently do much more than repay it to a great ſociety.

THE proper performance of thoſe ſeveral duties of the ſovereign neceſſarily ſuppoſes a certain expence; and this expence again neceſſarily requires a certain revenue to ſupport it. In the following book, therefore, I ſhall endeavour to explain; firſt, what are the neceſſary expences of the ſovereign or common-wealth; and which [289] of thoſe expences ought to be defrayed by the general contribution of the whole ſociety; and which of them, by that of ſome par⯑ticular part only, or of ſome particular members of the ſociety: ſecondly, what are the different methods in which the whole ſociety may be made to contribute towards defraying the expences incumbent on the whole ſociety, and what are the principal advan⯑tages and inconveniences of each of thoſe methods: and, thirdly, what are the reaſons and cauſes which have induced almoſt all modern governments to mortgage ſome part of this reve⯑nue, or to contract debts, and what have been the effects of thoſe debts upon the real wealth, the annual produce of the land and labour of the ſociety. The following book, therefore, will naturally be divided into three chapters.

CHAP. I. Of the Expences of the Sovereign or Commonwealth.

CHAP. II. Of the Sources of the general or publick Revenue of the Society.

THE revenue which muſt defray, not only the expence of defending the ſociety and of ſupporting the dignity of the chief magiſtrate, but all the other neceſſary expences of govern⯑ment, for which the conſtitution of the ſtate has not provided any particular revenue, may be drawn, either, firſt, from ſome fund which peculiarly belongs to the ſovereign or commonwealth, and which is independent of the revenue of the people; or, ſecondly, from the revenue of the people.

CHAP. III. Of publick Debts.

IN that rude ſtate of ſociety which precedes the extenſion of commerce and the improvement of manufactures, when thoſe expenſive luxuries which commerce and manufactures can alone in⯑troduce, are altogether unknown, the perſon who poſſeſſes a large revenue, I have endeavoured to ſhow in the third book of this inquiry, can ſpend or enjoy that revenue in no other way than by maintaining nearly as many people as it can maintain. A large revenue may at all times be ſaid to conſiſt in the command of a large quantity of the neceſſaries of life. In that rude ſtate of things it is commonly paid in a large quantity of thoſe neceſſaries, in the ma⯑terials of plain food and coarſe cloathing, in corn and cattle, in wool and raw hides. When neither commerce, nor manufactures furniſh any thing for which the owner can exchange the greater part of thoſe materials which are over and above his own conſump⯑tion, he can do nothing with the ſurplus but feed and cloathe nearly as many people as it will feed and cloathe. A hoſpitality in which there is no luxury, and a liberality in which there is no oſtentation, occaſion, in this ſituation of things, the principal expences of the rich and the great. But theſe, I have likewiſe endeavoured to ſhow in the ſame book, are expences by which people are not very apt to ruin themſelves. There is not perhaps any ſelfiſh pleaſure ſo frivolous, of which the purſuit has not ſometimes ruined even ſenſible men. A paſſion for cock-fighting has ruined many. Bu [...] the inſtances, I believe, are not very numerous of people who have been ruined by a hoſpitality or liberality of this kind; though the hoſpitality of luxury and the liberality of oſtentation have ruined many. Among our feudal anceſtors, the long time during which [534] eſtates uſed to continue in the ſame family ſufficiently demonſtrates the general diſpoſition of people to live within their income. Though the ruſtic hoſpitality conſtantly exerciſed by the great land⯑holders may not to us in the preſent times ſeem conſiſtent with that order which we are apt to conſider as inſeparably connected with good oeconomy, yet we muſt certainly allow them to have been at leaſt ſo far frugal as not commonly to have ſpent their whole income. A part of their wool and raw hides they had ge⯑nerally an opportunity of ſelling for money. Some part of this money perhaps they ſpent in purchaſing the few objects of vanity and luxury with which the circumſtances of the times could furniſh them; but ſome part of it they ſeem commonly to have hoarded. They could not well indeed do any thing elſe but hoard whatever money they ſaved. To trade was diſgraceful to a gentleman, and to lend money at intereſt, which at that time was conſidered as uſury and prohibited by law, would have been ſtill more ſo. In thoſe times of violence and diſorder, beſides, it was convenient to have a hoard of money at hand, that in caſe they ſhould be driven from their own home they might have ſomething of known value to carry with them to ſome place of ſafety. The ſame violence which made it convenient to hoard, made it equally convenient to conceal the hoard. The frequency of treaſure trove, or of treaſure found of which no owner was known, ſufficiently demonſtrates the frequency in thoſe times both of hoarding and of concealing the hoard. Treaſure-trove was then conſidered as an important branch of the revenue of the ſovereign. All the treaſure-trove of the kingdom would ſcarce perhaps in the preſent times make an important branch of the revenue of a private gentleman of a good eſtate.

THE ſame diſpoſition to ſave and to hoard prevailed in the ſove⯑reign, as well as in the ſubjects. Among nations to whom com⯑merce and manufactures are little known, the ſovereign, it has [535] already been obſerved in the fourth book, is in a ſituation which naturally diſpoſes him to the parſimony requiſite for accumulation. In that ſituation the expence even of a ſovereign cannot be directed by that vanity which delights in the gaudy finery of a court. The ignorance of the times affords but few of the trinkets in which that finery conſiſts. Standing armies are not then neceſſary, ſo that the expence even of a ſovereign, like that of any other great lord, can be employed in ſcarce any thing but bounty to his tenants, and hoſpitality to his retainers. But bounty and hoſpitality very ſeldom lead to extravagance; though vanity almoſt always does. All the antient ſovereigns of Europe accordingly, it has already been obſerved, had treaſures. Every Tartar chief in the preſent times is ſaid to have one.

IN a commercial country abounding with every ſort of expenſive luxury, the ſovereign, in the ſame manner as almoſt all the great proprietors in his dominions, naturally ſpends a great part of his revenue in purchaſing thoſe luxuries. His own and the neighbour⯑ing countries ſupply him abundantly with all the coſtly trinkets which compoſe the ſplendid, but inſignificant pageantry of a court. For the ſake of an inferior pageantry of the ſame kind, his nobles diſmiſs their retainers, make their tenants independent, and be⯑come gradually themſelves as inſignificant as the greater part of the wealthy burghers in his dominions. The ſame frivolous paſſions which influence their conduct influence his. How can it be ſuppoſed that he ſhould be the only rich man in his dominions who is inſenſible to pleaſures of this kind? If he does not, what he is very likely to do, ſpend upon thoſe pleaſures ſo great a part of his revenue as to debilitate very much the defenſive power of the ſtate, it cannot well be expected that he ſhould not ſpend upon them all that part of it which is over and above what is neceſſary for ſupporting that defenſive power. His ordinary expence be⯑comes [536] equal to his ordinary revenue, and it is well if it does not frequently exceed it. The amaſſing of treaſure can no longer be expected, and when extraordinary exigencies require extraordinary expences, he muſt neceſſarily call upon his ſubjects for an extraor⯑dinary aid. The preſent and the late king of Pruſſia are the only great princes of Europe who, ſince the death of Henry IV. of France in 1610, are ſuppoſed to have amaſſed any conſiderable treaſure. The parſimony which leads to accumulation has become almoſt as rare in republican as in monarchical governments. The Italian republics, the United Provinces of the Netherlands, are all in debt. The canton of Berne is the ſingle republic in Europe which has amaſſed any conſiderable treaſure. The other Swiſs republics have not. The taſte for ſome ſort of pageantry, for ſplendid buildings, at leaſt, and other publick ornaments, fre⯑quently prevails as much in the apparently ſober ſenate-houſe of a little republic as in the diſſipated court of the greateſt king.

THE want of parſimony in time of peace, impoſes the neceſſity of contracting debt in time of war. When war comes, there is no money in the treaſury but what is neceſſary for carrying on the ordinary expence of the peace eſtabliſhment. In war an eſtabliſh⯑ment of three or four times that expence becomes neceſſary for the defence of the ſtate, and conſequently a revenue three or four times greater than the peace revenue. Suppoſing that the ſovereign ſhould have, what he ſcarce ever has, the immediate means of augmenting his revenue in proportion to the augmentation of his expence, yet ſtill the produce of the taxes from which this increaſe of revenue muſt be drawn will not begin to come into the treaſury till per⯑haps ten or twelve months after they are impoſed. But the moment in which war begins, or rather the moment in which it appears likely to begin, the army muſt be augmented, the fleet muſt be fitted out, the garriſoned towns muſt be put into a poſture of defence; [537] that army, that fleet, thoſe garriſoned towns muſt be furniſhed with arms, ammunition and proviſions. An immediate and great expence muſt be incurred in that moment of immediate danger, which will not wait for the gradual and ſlow returns of the new taxes. In this exigency government can have no other reſource but in borrowing.

THE ſame commercial ſtate of ſociety which, by the operation of moral cauſes, brings government in this manner into the ne⯑ceſſity of borrowing, produces in the ſubjects both an ability and an inclination to lend. If it commonly brings along with it the neceſſity of borrowing, it likewiſe brings along with it the facility of doing ſo.

A COUNTRY abounding with merchants and manufacturers, neceſſarily abounds with a ſet of people through whoſe hands, not only their own capitals, but the capitals of all thoſe who either lend them money, or truſt them with goods, paſs as fre⯑quently, or more frequently, than the revenue of a private man, who, without trade or buſineſs, lives upon his income, paſſes through his hands. The revenue of ſuch a man can regularly paſs through his hands only once in the year. But the whole amount of the capital and credit of a merchant who deals in a trade of which the returns are very quick, may ſometimes paſs through his hands two, three, or four times in a year. A country abounding with merchants and manufacturers, therefore, neceſ⯑ſarily abounds with a ſet of people who have it at all times in their power to advance, if they chuſe to do ſo, a very large ſum of mo⯑ney to government. Hence the ability in the ſubjects of a com⯑mercial ſtate to lend.

COMMERCE and manufactures can ſeldom flouriſh long in any ſtate which does not enjoy a regular adminiſtration of juſtice, in which the people do not feel themſelves ſecure in the poſſeſſion of [538] their property, in which the faith of contracts is not ſupported by law, and in which the authority of the ſtate is not ſuppoſed to be regularly employed in enforcing the payment of debts from all thoſe who are able to pay. Commerce and manufactures, in ſhort, can ſeldom flouriſh in any ſtate in which there is not a certain degree of confidence in the juſtice of government. The ſame confidence which diſpoſes great merchants and manufac⯑turers, upon ordinary occaſions, to truſt their property to the pro⯑tection of a particular government; diſpoſes them, upon extraor⯑dinary occaſions, to truſt that government with the uſe of their property. By lending money to government, they do not even for a moment diminiſh their ability to carry on their trade and manufactures. On the contrary, they commonly augment it. The neceſſities of the ſtate render government upon moſt oc⯑caſions willing to borrow upon terms extremely advantageous to the lender. The ſecurity which it grants to the original creditor, is made transferable to any other creditor, and, from the univerſal confidence in the juſtice of the ſtate, generally ſells in the market for more than was originally paid for it. The merchant or monied man makes money by lending money to go⯑vernment, and inſtead of diminiſhing, increaſes his trading capi⯑tal. He generally conſiders it as a favour, therefore, when the adminiſtration admits him to a ſhare in the firſt ſubſcription for a new loan. Hence the inclination or willingneſs in the ſubjects of a commercial ſtate to lend.

THE government of ſuch a ſtate is very apt to repoſe itſelf upon this ability and willingneſs of its ſubjects to lend it their money on extraordinary occaſions. It foreſees the facility of bor⯑rowing, and therefore diſpenſes itſelf from the duty of ſaving.

IN a rude ſtate of ſociety there are no great mercantile or manufacturing capitals. The individuals who hoard whatever [539] money they can ſave, and who conceal their hoard, do ſo from a diſtruſt of the juſtice of government, from a fear that if it was known that they had a hoard, and where that hoard was to be found, they would quickly be plundered. In ſuch a ſtate of things few people would be able, and nobody would be willing to lend their money to government on extraordinary exigencies. The ſovereign feels that he muſt provide for ſuch exigencies by ſaving, becauſe he foreſees the abſolute impoſſibility of borrowing. This foreſight increaſes ſtill further his natural diſpoſition to ſave.

THE progreſs of the enormous debts which at preſent oppreſs, and will in the long-run probably ruin all the great nations of Europe, has been pretty uniform. Nations, like private men, have generally begun to borrow upon what may be called perſonal credit, without aſſigning or mortgaging any particular fund for the payment of the debt; and when this reſource has failed them, they have gone on to borrow upon aſſignments or mortgages of particular funds.

WHAT is called the unfunded debt of Great Britain, is con⯑tracted in the former of thoſe two ways. It conſiſts partly in a debt which bears or is ſuppoſed to bear no intereſt, and which reſembles the debts that a private man contracts upon account; and partly in a debt which bears intereſt, and which reſembles what a private man contracts upon his bill or promiſſory note. The debts which are due either for extraordinary ſervices, or for ſervices either not provided for, or not paid at the time when they are performed; part of the extraordinaries of the army, navy, and ordnance, the arrears of ſubſidies to foreign princes, thoſe of ſeamens wages, &c. uſually conſtitute a debt of the firſt kind. Navy and exchequer bills, which are iſſued ſometimes in pay⯑ment of a part of ſuch debts, and ſometimes for other purpoſes; [540] conſtitute a debt of the ſecond kind; exchequer bills bearing in⯑tereſt from the day on which they are iſſued, and navy bills ſix months after they are iſſued. The bank of England, either by volun⯑tarily diſcounting thoſe bills at their current value; or by agreeing with government for certain conſiderations to circulate Exchequer bills, that is, to receive them at par, paying the intereſt which happens to be due upon them, keeps up their value and facili⯑tates their circulation, and thereby frequently enables government to contract a very large debt of this kind. In France, where there is no bank, the ſtate bills (billets d'etat) ^† have ſometimes ſold at ſixty and ſeventy per cent. diſcount. During the great re-coinage in king William's time, when the bank of England thought proper to put a ſtop to its uſual tranſactions, exchequer bills and tallies are ſaid to have ſold from twenty-five to ſixty per cent. diſcount; owing partly, no doubt, to the ſuppoſed inſtability of the new government eſtabliſhed by the revolution, but partly too to the want of the ſupport of the bank of England.

WHEN this reſource is exhauſted, and it becomes neceſſary, in order to raiſe money, to aſſign or mortgage ſome particular branch of the public revenue for the payment of the debt, government has upon different occaſions done this in two different ways. Some⯑times it has made this aſſignment or mortgage for a ſhort period of time only, a year or a few years, for example; and ſometimes for perpetuity. In the one caſe the fund was ſuppoſed ſufficient to pay, within the limited time, both principal and intereſt of the money borrowed. In the other it was ſuppoſed ſufficient to pay the intereſt only, or a perpetual annuity equivalent to the intereſt, government being at liberty to redeem at any time this annuity upon paying back the principal ſum borrowed. When money was raiſed in the one way, it was ſaid to be raiſed by anticipation; when in the other, by perpetual funding, or, more ſhortly, by funding.

[541] IN Great Britain the annual land and malt taxes are regularly anticipated every year, by virtue of a borrowing clauſe conſtantly inſerted into the acts which impoſe them. The bank of Eng⯑land generally advances at an intereſt, which ſince the revolution has varied from eight to three per cent. the ſums for which thoſe taxes are granted, and receives payment as their produce gra⯑dually comes in. If there is a deficiency, which there always is, it is provided for in the ſupplies of the enſuing year. The only conſiderable branch of the public revenue which yet remains unmortgaged is thus regularly ſpent before it comes in. Like an unprovident ſpendthrift, whoſe preſſing occaſions will not allow him to wait for the regular payment of his revenue, the ſtate is in the conſtant practice of borrowing of its own factors and agents, and of paying intereſt for the uſe of its own money.

IN the reign of king William, and during a great part of that of queen Anne, before we had become ſo familiar as we are now with the practice of perpetual funding, the greater part of the new taxes were impoſed but for a ſhort period of time, (for four, five, ſix, or ſeven years only) and a great part of the grants of every year conſiſted in loans upon anticipations of the produce of thoſe taxes. The produce being frequently inſuffi⯑cient for paying within the limited term the principal and intereſt of the money borrowed, deficiencies aroſe, to make good which it became neceſſary to prolong the term.

IN 1697, by the 8th of William III. c. 20. the deficiencies of ſeveral taxes were charged upon what was then called the firſt general mortgage or fund, conſiſting of a prolongation to the firſt of Auguſt, 1706, of ſeveral different taxes, which would have expired within a ſhorter term, and of which the produce was accumulated into one general fund. The deficiencies charged upon this prolonged term amounted to 5,160,459 l. 14s. 9¼d.

[542] IN 1701 thoſe duties with ſome others were ſtill further pro⯑longed for the like purpoſes till the firſt of Auguſt, 1710, and were called the ſecond general mortgage or fund. The deficien⯑cies charged upon it amounted to 2,055,999 l. 7s. 11½d.

IN 1707, thoſe duties were ſtill further prolonged, as a fund for new loans, to the firſt of Auguſt, 1712, and were called the third general mortgage or fund. The ſum borrowed upon it was 983,254 l. 11s. 9¼d.

IN 1708, thoſe duties were all (except the old ſubſidy of ton⯑nage and poundage, of which one moiety only was made a part of this fund, and a duty upon the importation of Scotch linen, which had been taken off by the articles of union) ſtill further continued, as a fund for new loans, to the firſt of Auguſt, 1714, and were called the fourth general mortgage or fund. The ſum borrowed upon it was 925,1761. 9s. 2¼d.

IN 1709, thoſe duties were all (except the old ſubſidy of ton⯑nage and poundage, which was now left out of this fund alto⯑gether) ſtill further continued for the ſame purpoſe to the firſt of Auguſt, 1716, and were called the fifth general mortgage or fund. The ſum borrowed upon it was 922,029 l. 6s. od.

IN 1710, thoſe duties were again prolonged to the firſt of Au⯑guſt, 1720, and were called the ſixth general mortgage or fund. The ſum borrowed upon it was 1,296,552 l. 9s. 11¾d.

IN 1711, the ſame duties (which at this time were thus ſubject to four different anticipations) together with ſeveral others were continued for ever, and made a fund for paying the intereſt of the capital of the South Sea company, which had that year ad⯑vanced to government, for paying debts and making good defi⯑ciencies, the ſum of 9,177,967 l. 15s. 4d. the greateſt loan which at that time had ever been made.

[543] BEFORE this period, the principal, ſo far as I have been able to obſerve, the only taxes which in order to pay the intereſt of a debt had been impoſed for perpetuity, were thoſe for paying the intereſt of the money which had been advanced to government by the Bank and Eaſt India company, and of what it was expected would be advanced, but which was never advanced, by a pro⯑jected land-bank. The bank fund at this time amounted to 3,375,027l. 17s. 10½d. for which was paid an annuity or intereſt of 206,501l. 13s. 5d. The Eaſt India fund amounted to 3,200,000l. for which was paid an annuity or intereſt of 160,000l.; the bank fund being at ſix per cent. the Eaſt India fund at five per cent. intereſt.

IN 1715, by the firſt of George I. c. 12. the different taxes which had been mortgaged for paying the bank annuity, together with ſeveral others which by this act were likewiſe rendered per⯑petual, were accumulated into one common fund called The Aggregate Fund, which was charged, not only with the payment of the bank annuity, but with ſeveral other annuities and bur⯑dens of different kinds. This fund was afterwards augmented by the third of George I. c. 8. and by the fifth of George I. c. 3. and the different duties which were then added to it were likewiſe rendered perpetual.

IN 1717, by the third of George I. c. 7. ſeveral other taxes were rendered perpetual, and accumulated into another common fund, called The General Fund, for the payment of certain an⯑nuities, amounting in the whole to 724,849l. 6s. 10½d.

IN conſequence of thoſe different acts, the greater part of the taxes which before had been anticipated only for a ſhort term of years, were rendered perpetual as a fund for paying, not the capital, but the intereſt only, of the money which had been bor⯑rowed upon them by different ſucceſſive anticipations.

[544] HAD money never been raiſed but by anticipation, the courſe of a few years would have liberated the public revenue, without any other attention of government beſides that of not overloading the fund by charging it with more debt than it could pay within the limited term, and of not anticipating a ſecond time before the ex⯑piration of the firſt anticipation. But the greater part of European governments have been incapable of thoſe attentions. They have frequently overloaded the fund even upon the firſt anticipation; and when this happened not to be the caſe, they have generally taken care to overload it by anticipating a ſecond and a third time before the expiration of the firſt anticipation. The fund becoming in this manner altogether inſufficient for paying both principal and intereſt of the money borrowed upon it, it became neceſſary to charge it with the intereſt only, or a perpetual annuity equal to the intereſt, and ſuch unprovident anticipations neceſſarily gave birth to the more ruinous practice of perpetual funding. But though this practice neceſſarily puts off the liberation of the public revenue from a fixed period to one ſo indefinite that it is not very likely ever to arrive; yet as a greater ſum can in all caſes be raiſed by this new practice than by the old one of anticipations, the former, when men have once become familiar with it, has in the great exigencies of the ſtate been univerſally preferred to the latter. To relieve the preſent exigency is always the object which principally intereſts thoſe immediately concerned in the admini⯑ſtration of public affairs. The future liberation of the public revenue, they leave to the care of poſterity.

DURING the reign of queen Anne, the market rate of intereſt had fallen from ſix to five per cent. and in the twelfth year of her reign five per cent. was declared to be the higheſt rate which could lawfully be taken for money borrowed upon private ſecurity. Soon after the greater part of the temporary taxes of Great Britain had been rendered perpetual, and diſtributed into the Aggregate, South Sea, and General Funds, the creditors of the [545] publick, like thoſe of private perſons, were induced to accept of five per cent. for the intereſt of their money, which occaſioned a ſaving of one per cent. upon the capital of the greater part of the debts which had been thus funded for perpetuity, or of one-ſixth of the greater part of the annuities which were paid out of the three great funds above mentioned. This ſaving left a conſiderable ſurplus in the produce of the different taxes which had been accu⯑mulated into thoſe funds, over and above what was neceſſary for paying the annuities which were now charged upon them, and laid the foundation of what has ſince been called the Sinking Fund. In 1717, it amounted to 323,434l. 7s. 7½d. In 1727, the in⯑tereſt of the greater part of the public debts was ſtill further re⯑duced to four per cent.; and in 1753 and 1757, to three and a half and three per cent.; which reductions ſtill further augmented the ſinking fund.

A SINKING fund, though inſtituted for the payment of old, facilitates very much the contracting of new debts. It is a ſub⯑ſidiary fund always at hand to be mortgaged in aid of any other doubtful fund, upon which money is propoſed to be raiſed in any exigency of the ſtate. Whether the ſinking fund of Great Britain has been more frequently applied to the one or to the other of thoſe two purpoſes, will ſufficiently appear by and by.

BESIDES thoſe two methods of borrowing, by anticipations and by perpetual funding, there are two other methods, which hold a ſort of middle place between them. Theſe are, that of borrowing upon annuities for terms of years, and that of borrowing upon annuities for lives.

DURING the reigns of king William and queen Anne, large ſums were frequently borrowed upon annuities for terms of years, which [546] were ſometimes longer and ſometimes ſhorter. In 1693, an act was paſſed for borrowing one million upon an annuity of fourteen per cent. or of 140,000l. a year for ſixteen years. In 1691, an act was paſſed for borrowing a million upon annuities for lives, upon terms which in the preſent times would appear very advan⯑tageous. But the ſubſcription was not filled up. In the following year the deficiency was made good by borrowing upon annuities for lives at fourteen per cent. or at little more than ſeven years pur⯑chaſe. In 1695, the perſons who had purchaſed thoſe annuities were allowed to exchange them for others of ninety-ſix years, upon paying into the Exchequer ſixty-three pounds in the hun⯑dred; that is, the difference between fourteen per cent. for life, and fourteen per cent. for ninety-ſix years, was ſold for ſixty-three pounds, or for four and a half years purchaſe. Such was the ſup⯑poſed inſtability of government, that even theſe terms procured few purchaſers. In the reign of queen Anne, money was upon different occaſions borrowed both upon annuities for lives, and upon annuities for terms of thirty-two, of eighty-nine, of ninety⯑eight, and of ninety-nine years. In 1719, the proprietors of the annuities for thirty-two years were induced to accept in lieu of them South-ſea ſtock to the amount of eleven and a half years pur⯑chaſe of the annuities, together with an additional quantity of ſtock equal to the arrears which happened then to be due upon them. In 1720, the greater part of the other annuities for terms of years both long and ſhort were ſubſcribed into the ſame fund. The long annuities at that time amounted to 666,821l. 8s. 3½d. a year. On the 5th of January, 1775, the remainder of them, or what was not ſubſcribed at that time, amounted only to 136,453l. 12s. 8d.

DURING the two wars which begun in 1739, and in 1755, little money was borrowed either upon annuities for terms of years, or [547] upon thoſe for lives. An annuity for ninety-eight or ninety-nine years, however, is worth nearly as much money as a perpetuity, and ſhould therefore, one might think, be a fund for borrowing nearly as much. But thoſe who, in order to make family ſettle⯑ments, and to provide for remote futurity, buy into the public ſtocks, would not care to purchaſe into one of which the value was continually diminiſhing; and ſuch people make a very conſiderable proportion both of the proprietors and purchaſers of ſtock. An annuity for a long term of years therefore, though its intrinſic value may be very nearly the ſame with that of a perpetual annuity, will not find nearly the ſame number of purchaſers. The ſub⯑ſcribers to a new loan, who mean generally to ſell their ſubſcription as ſoon as poſſible, prefer greatly a perpetual annuity redeemable by parliament, to an irredeemable annuity for a long term of years of only equal amount. The value of the former may be ſuppoſed always the ſame or very nearly the ſame, and it makes therefore a more convenient transferable ſtock than the latter.

DURING the two laſt mentioned wars, annuities either for terms of years or for lives were ſeldom granted but as premiums to the ſubſcribers to a new loan, over and above the redeemable annuity or intereſt upon the credit of which the loan was ſuppoſed to be made. They were granted, not as the proper fund upon which the money was borrowed; but as an additional encouragement to the lender.

ANNUITIES for lives have occaſionally been granted in two different ways; either upon ſeparate lives, or upon lots of lives, which in French are called Tontines, from the name of their in⯑ventor. When annuities are granted upon ſeparate lives, the death of every individual annuitant diſburthens the public revenue ſo far as it was affected by his annuity. When annuities are [548] granted upon tontines, the liberation of the public revenue does not commence till the death of all the annuitants comprehended in one lot, which may ſometimes conſiſt of twenty or thirty per⯑ſons, of whom the ſurvivors ſucceed to the annuities of all thoſe who die before them; the laſt ſurvivor ſucceeding to the annui⯑ties of the whole lot. Upon the ſame revenue more money can always be raiſed by tontines than by annuities for ſeparate lives. An annuity, with a right of ſurvivorſhip, is really worth more than an equal annuity for a ſeparate life, and from the confidence which every man naturally has in his own good fortune, the principle upon which is founded the ſucceſs of all lotteries, ſuch an annuity generally ſells for ſomething more than it is worth. In countries where it is uſual for government to raiſe money by granting annuities, tontines are upon this account generally pre⯑ferred to annuities for ſeparate lives. The expedient which will raiſe moſt money, is almoſt always preferred to that which is likely to bring about in the ſpeedieſt manner the liberation of the public revenue.

IN France a much greater proportion of the public debts con⯑ſiſts in annuities for lives than in England. According to a memoir preſented by the parliament of Bourdeaux to the king in 1764, the whole public debt of France is eſtimated at twenty⯑four hundred millions of livres; of which the capital for which annuities for lives had been granted, is ſuppoſed to amount to three hundred millions, the eighth-part of the whole public debt. The annuities themſelves are computed to amount to thirty millions a year, the fourth part of one hundred and twenty millions, the ſuppoſed intereſt of that whole debt. Theſe eſti⯑mations, I know very well, are not exact, but having been pre⯑ſented by ſo very reſpectable a body as approximations to the truth, they may, I apprehend, be conſidered as ſuch. It is not the different degrees of anxiety in the two governments of France [549] and England for the liberation of the public revenue, which occa⯑ſions this difference in their reſpective modes of borrowing. It ariſes altogether from the different views and intereſts of the lenders.

IN England, the ſeat of government being in the greateſt mer⯑cantile city in the world, the merchants are generally the people who advance money to government. By advancing it they do not mean to diminiſh, but, on the contrary, to increaſe their mercantile capitals; and unleſs they expected to ſell with ſome profit their ſhare in the ſubſcription for a new loan, they never would ſubſcribe. But if by advancing their money they were to purchaſe, inſtead of perpetual annuities, annuities for lives only, whether their own or thoſe of other people, they would not always be ſo likely to ſell them with a profit. Annuities upon their own lives they would always ſell with loſs; becauſe no man will give for an annuity upon the life of another, whoſe age and ſtate of health are nearly the ſame with his own, the ſame price which he would give for one upon his own. An annuity upon the life of a third perſon, indeed, is, no doubt, of equal value to the buyer and the ſeller; but its real value begins to diminiſh from the moment it is granted, and continues to do ſo more and more as long as it ſubſiſts. It can never, therefore, make ſo convenient a transferable ſtock as a perpetual annuity, of which the real value may be ſuppoſed always the ſame, or very nearly the ſame.

IN France, the ſeat of government not being in a great mercan⯑tile city, merchants do not make ſo great a proportion of the peo⯑ple who advance money to government. The people concerned in the finances, the farmers general, the receivers of the taxes which are not in farm, the court bankers, &c. make the greater part of thoſe who advance their money in all public exigencies. Such people are commonly men of mean birth, but of great wealth, and fre⯑quently [550] of great pride. They are too proud to marry thir equals, and women of quality diſdain to marry them. They frequently reſolve, therefore, to live bachelors, and having neither any fami⯑lies of their own, nor much regard for thoſe of their relations, whom they are not always very fond of acknowledging, they deſire only to live in ſplendor during their own time, and are not unwil⯑ling that their fortune ſhould end with themſelves. The number of rich people, beſides, who are either averſe to marry, or whoſe condition of life renders it either improper or inconvenient for them to do ſo, is much greater in France than in England. To ſuch people, who have little or no care for poſterity, nothing can be more convenient than to exchange their capital for a revenue, which is to laſt juſt as long as, and no longer than, they wiſh it to do.

THE ordinary expence of the greater part of modern govern⯑ments in time of peace being equal or nearly equal to their ordi⯑nary revenue, when war comes they are both unwilling and unable to increaſe their revenue in proportion to the increaſe of their ex⯑pence. They are unwilling, for fear of offending the people, who, by ſo great and ſo ſudden an increaſe of taxes, would ſoon be diſ⯑guſted with the war; and they are unable, from not well know⯑ing what taxes would be ſufficient to produce the revenue wanted. The facility of borrowing delivers them from the embarraſſment which this fear and inability would otherwiſe occaſion. By means of borrowing they are enabled, with a very moderate increaſe of taxes, to raiſe, from year to year, money ſufficient for carrying on the war, and by the practice of perpetual funding they are enabled, with the ſmalleſt poſſible increaſe of taxes, to raiſe annually the largeſt poſſible ſum of money. In great empires the people who live in the capital, and in the provinces remote from the ſcene of action, feel, many of them, ſcarce any inconveniency from the [551] war; but enjoy, at their eaſe, the amuſement of reading in the news-papers the exploits of their own fleets and armies. To them this amuſement compenſates the ſmall difference between the taxes which they pay on account of the war, and thoſe which they had been accuſtomed to pay in time of peace. They are commonly diſſatisfied with the return of peace, which puts an end to their amuſement, and to a thouſand viſionary hopes of conqueſt, and national glory, from a longer continuance of the war.

THE return of peace, indeed, ſeldom relieves them from the greater part of the taxes impoſed during the war. Theſe are mort⯑gaged for the intereſt of the debt contracted in order to carry it on. If, over and above paying the intereſt of this debt, and defraying the ordinary expence of government, the old revenue, together with the new taxes, produce ſome ſurplus revenue, it may perhaps be converted into a ſinking fund for paying off the debt. But, in the firſt place, this ſinking fund, even ſuppoſing it ſhould be applied to no other purpoſe, is generally altogether inadequate for paying, in the courſe of any period during which it can reaſonably be expected that peace ſhould continue, the whole debt contracted during the war; and, in the ſecond place, this fund is almoſt always applied to other purpoſes.

THE new taxes were impoſed for the ſole purpoſe of paying the intereſt of the money borrowed upon them. If they produce more, it is generally ſomething which was neither intended nor expected, and is therefore ſeldom very conſiderable. Sinking funds have gene⯑rally ariſen, not ſo much from any ſurplus of the taxes which was over and above what was neceſſary for paying the intereſt or an⯑nuity originally charged upon them, as from a ſubſequent reduc⯑tion of that intereſt. That of Holland in 1655, and that of the eccleſiaſtical ſtate in 1685, were both formed in this manner. Hence the uſual inſufficiency of ſuch funds.

[552] DURING the moſt profound peace, various events occur which require an extraordinary expence, and government finds it always more convenient to defray this expence by miſapplying the ſinking fund than by impoſing a new tax. Every new tax is immediately felt more or leſs by the people. It occaſions always ſome mur⯑mur, and meets with ſome oppoſition. The more taxes may have been multiplied, the higher they may have been raiſed upon every different ſubject of taxation; the more loudly the people complain of every new tax, the more difficult it becomes too either to find out new ſubjects of taxation, or to raiſe much higher the taxes already impoſed upon the old. A momentary ſuſpenſion of the payment of debt is not immediately felt by the people, and occa⯑ſions neither murmur nor complaint. To borrow of the ſinking fund is always an obvious and eaſy expedient for getting out of the preſent difficulty. The more the public debts may have been accu⯑mulated, the more neceſſary it may have become to ſtudy to reduce them, the more dangerous, the more ruinous it may be to miſapply any part of the ſinking fund; the leſs likely is the public debt to be reduced to any conſiderable degree, the more likely, the more certainly is the ſinking fund to be miſapplied towards defraying all the extraordinary expences which occur in time of peace. When a nation is already overburdened with taxes, nothing but the neceſſities of a new war, nothing but either the animoſity of national vengeance, or the anxiety for national ſecurity, can induce the people to ſub⯑mit, with tolerable patience, to a new tax. Hence the uſual miſ⯑application of the ſinking fund.

IN Great Britain, from the time that we had firſt recourſe to the ruinous expedient of perpetual funding, the reduction of the pub⯑lic debt in time of peace, has never borne any proportion to its accumulation in time of war. It was in the war which began in 1688, and was concluded by the treaty of Ryſwick in 1697, that the foundation of the preſent enormous debt of Great Britain was firſt laid.

[553] ON the 31ſt of December, 1697, the public debts of Great Bri⯑tain, funded and unfunded, amounted to 21,515,742l. 13s. 8½d. A great part of thoſe debts had been contracted upon ſhort anti⯑cipations, and ſome part upon annuities for lives; ſo that before the 31ſt of December, 1701, in leſs than four years, there had partly been paid off, and partly reverted to the public, the ſum of 5,121,041l. 12s. 0¾d.; a greater reduction of the public debt than has ever ſince been brought about in ſo ſhort a period of time. The remaining debt, therefore, amounted only to 16,394,701l. 1s. 7¼d.

IN the war which began in 1702, and which was concluded by the treaty of Utrecht, the public debts were ſtill more accumu⯑lated. On the 31ſt of December, 1714, they amounted to 53,681,076l. 5s. 61/12d. The ſubſcription into the South Sea fund of the long and ſhort annuities increaſed the capital of the public debts, ſo that on the 31ſt of December, 1722, it amounted to 55,282,978l. 1s. 35/6d. The reduction of the debt began in 1723, and went on ſo ſlowly that, on the 31ſt of December, 1739, during ſeventeen years of profound peace, the whole ſum paid off was no more than 8,328,354l. 17s. 113/12d. the capital of the public debt at that time amounting to 46,954,623l. 3s. 47/12d.

THE Spaniſh war, which began in 1739, and the French war which ſoon followed it, occaſioned a further encreaſe of the debt, which, on the 31ſt of December, 1748, after the war had been concluded by the treaty of Aix la Chapelle, amounted to 78,293,313l. 1s. 10¾d. The moſt profound peace of ſeventeen years continuance had taken no more than 8,328,354l. 17s. 113/12d. from it. A war of leſs than nine years continuance added 31,338,689l. 18s. 61/6d. to it ^*.

DURING the adminiſtration of Mr. Pelham, the intereſt of the public debt was reduced, or at leaſt meaſures were taken for reduce⯑ing [554] it, from four to three per cent.; the ſinking fund was increaſed, and ſome part of the public debt was paid off. In 1755, before the breaking out of the late war, the funded debt of Great Britain amounted to 72,289,673l. On the 5th of January, 1763, at the concluſion of the peace, the funded debt amounted to 122,603,336l. 8s. 2¼d. The unfunded debt has been ſtated at 13,927,589l. 2s. 2d. But the expence occaſioned by the war did not end with the concluſion of the peace; ſo that though on the 5th of Janu⯑ary, 1764, the funded debt was increaſed (partly by a new loan, and partly by funding a part of the unfunded debt) to 129,586,789l. 10s. 1¾d. there ſtill remained (according to the very well informed author of the Conſiderations on the trade and finances of Great Britain) an unfunded debt, which was brought to account in that and the following year, of 9,975,017l. 12s. 215/44d. In 1764, therefore, the public debt of Great Britain, funded and unfunded together, amounted, according to this author, to 139,561,807l. 2s. 4d. The annuities for lives too, which had been granted as premiums to the ſubſcribers to the new loans in 1757, eſtimated at fourteen years purchaſe, were valued at 472,500l.; and the annuities for long terms of years, granted as premiums likewiſe, in 1761 and 1762, eſtimated at 27½ years purchaſe, were valued at 6,826,875l. During a peace of about ſeven years continuance, the prudent and truly patriot adminiſtra⯑tion of Mr. Pelham, was not able to pay off an old debt of ſix millions. During a war of nearly the ſame continuance, a new debt of more than ſeventy-five millions was contracted.

ON the 5th of January, 1775, the funded debt of Great Britain amounted to 124,996,086l. 1s. 6¼d. The unfunded, excluſive of a large civil liſt debt, to 4,150,236l. 3s. 117/8d. Both together, to 129,146,322l. 5s. 6d. According to this account the whole debt paid off during eleven years profound peace amounted only to 10,415,474l. 16s. 97/8d. Even this [555] ſmall reduction of debt, however, has not been all made from the ſavings out of the ordinary revenue of the ſtate. Several extraneous ſums, altogether independant of that ordinary revenue, have contributed towards it. Among theſe we may reckon an additional ſhilling in the pound land tax for three years; the two millions received from the Eaſt India company, as indemnification for their territorial acquiſitions; and the one hundred and ten thouſand pounds received from the bank for the renewal of their charter. To theſe muſt be added ſeveral other ſums which, as they aroſe out of the late war, ought perhaps to be conſidered as deductions from the expences of it. The prin⯑cipal are,

If we add to this ſum the balance of the earl of Chatham's and Mr. Calcraſt's accounts, and other army ſavings of the ſame kind, together with what has been received from the bank, the Eaſt India company, and the additional ſhilling in the pound, land tax; the whole muſt be a good deal more than five millions. The debt, therefore, which ſince the peace has been paid out of the ſavings from the ordinary revenue of the ſtage, has not, one year with another, amounted to half a million a year. The ſinking fund has, no doubt, been conſiderably augmented ſince the peace, by the debt which has been paid off, by the reduction of the redeemable four per cents. to three per cents. and by the annuities for lives which have fallen in, and, if peace was to continue, [556] a million perhaps might now be annually ſpared out of it towards the diſcharge of the debt. Another million, accordingly, was paid in the courſe of laſt year; but, at the ſame time, a large civil liſt debt was left unpaid, and we are now involved in a new war which, in its progreſs, may prove as expenſive as any of our former wars. The new debt which will probably be con⯑tracted before the end of the next campaign, may perhaps be nearly equal to all the old debt which has been paid off from the ſavings out of the ordinary revenue of the ſtate. It would be altogether chimerical, therefore, to expect that the public debt ſhould ever be completely diſcharged by any ſavings which are likely to be made from that ordinary revenue as it ſtands at pre⯑ſent.

THE public funds of the different indebted nations of Europe, particularly thoſe of England, have by one author been repre⯑ſented as the accumulation of a great capital ſuper-added to the other capital of the country, by means of which its trade is ex⯑tended, its manufactures multiplied, and its lands cultivated and improved much beyond what they could have been by means of that other capital only. He does not conſider that the capital which the firſt creditors of the public advanced to government, was, from the moment in which they advanced it, a certain por⯑tion of the annual produce turned away from ſerving in the function of a capital, to ſerve in that of a revenue; from main⯑taining productive labourers to maintain unproductive ones, and to be ſpent and waſted, generally in the courſe of the year, without even the hope of any future reproduction. In return for the capital which they advanced they obtained, indeed, an annuity in the public funds in moſt caſes of more than equal value. This annuity, no doubt, replaced to them their capital, and enabled them to carry on their trade and buſineſs to the ſame or perhaps to a greater extent than before; that is, they were enabled either [557] to borrow of other people a new capital upon the credit of this annuity, or by ſelling it to get from other people a new capital of their own, equal or ſuperior to that which they had advanced to government. This new capital, however, which they in this manner either bought or borrowed of other people, muſt have exiſted in the country before, and muſt have been employed, as all capitals are, in maintaining productive labour. When it came into the hands of thoſe who had advanced their money to govern⯑ment, though it was in ſome reſpects a new capital to them, it was not ſo to the country; but was only a capital withdrawn from certain employments in order to be turned towards others. Though it replaced to them what they had advanced to government, it did not replace it to the country. Had they not advanced this capital to government, there would have been in the country two capitals, two portions of the annual produce, inſtead of one, em⯑ployed in maintaining productive labour.

WHEN for defraying the expence of government a revenue is raiſed within the year from the produce of free or unmortgaged taxes, a certain portion of the revenue of private people is only turned away from maintaining one ſpecies of unproductive labour, towards maintaining another. Some part of what they pay in thoſe taxes might no doubt have been accumulated into capital, and conſequently employed in maintaining productive labour; but the greater part would probably have been ſpent and conſequently em⯑ployed in maintaining unproductive labour. The public expence however, when defrayed in this manner, no doubt hinders more or leſs the further accumulation of new capital; but it does not ne⯑ceſſarily occaſion the deſtruction of any actually exiſting capital.

WHEN the publick expence is defrayed by funding, it is defrayed by the annual deſtruction of ſome capital which had before exiſted [558] in the country; by the perverſion of ſome portion of the annual produce which had before been deſtined for the maintenance of productive labour, towards that of unproductive labour. As in this caſe, however, the taxes are lighter than they would have been, had a revenue ſufficient for defraying the ſame expence been raiſed within the year; the private revenue of individuals is neceſ⯑ſarily leſs burthened, and conſequently their ability to ſave and accu⯑mulate ſome part of that revenue into capital is a good deal leſs impaired. If the method of funding deſtroys more old capital, it at the ſame time hinders leſs the accumulation or acquiſition of new capital, than that of defraying the public expence by a revenue raiſed within the year. Under the ſyſtem of funding, the frugality and induſtry of private people can more eaſily repair the breaches which the waſte and extravagance of government may occaſionally make in the general capital of the ſociety.

IT is only during the continuance of war, however, that the ſyſtem of funding has this advantage over the other ſyſtem. Were the expence of war to be defrayed always by a revenue raiſed within the year, the taxes from which that extraordinary revenue was drawn would laſt no longer than the war. The ability of private people to accumulate, though leſs during the war, would have been greater during the peace than under the ſyſtem of funding. War would not neceſſarily have occaſioned the deſtruc⯑tion of any old capitals, and peace would have occaſioned the accumulation of many more new. Wars would in general be more ſpeedily concluded, and leſs wantonly undertaken. The peo⯑ple feeling, during the continuance of the war, the complete burden of it, would ſoon grow weary of it, and government, in order to humour them, would not be under the neceſſity of carry⯑ing it on longer than it was neceſſary to do ſo. The foreſight of the heavy and unavoidable burdens of war would hinder the [559] people from wantonly calling for it when there was no real or ſolid intereſt to fight for. The ſeaſons during which the ability of private people to accumulate was ſomewhat impaired, would occur more rarely, and be of ſhorter continuance. Thoſe, on the contrary, during which that ability was in the higheſt vigour, would be of much longer duration than they can well be under the ſyſtem of funding.

WHEN funding, beſides, has made a certain progreſs, the mul⯑tiplication of taxes which it brings along with it ſometimes im⯑pairs as much the ability of private people to accumulate even in time of peace, as the other ſyſtem would in time of war. The peace revenue of Great Britain amounts at preſent to more than ten millions a year. If free and unmortgaged, it might be ſufficient, with proper management and without contracting a ſhilling of new debt, to carry on the moſt vigorous war. The private revenue of the inhabitants of Great Britain is at preſent as much encum⯑bered in time of peace, their ability to accumulate is as much impaired as it would have been in the time of the moſt expenſive war, had the pernicious ſyſtem of funding never been adopted.

IN the payment of the intereſt of the public debt, it has been ſaid, it is the right hand which pays the left. The money does not go out of the country. It is only a part of the revenue of one ſet of the inhabitants which is transferred to another; and the nation is not a farthing the poorer. This apology is founded altogether in the ſophiſtry of the mercantile ſyſtem, and after the long examination which I have already beſtowed upon that ſyſtem, it may perhaps be unneceſſary to ſay any thing further about it. It ſuppoſes, beſides, that the whole public debt is owing to the inha⯑bitants of the country, which happens not to be true; the Dutch, as well as ſeveral other foreign nations, having a very conſiderable [560] ſhare in our public funds. But though the whole debt were owing to the inhabitants of the country, it would not upon that account be leſs pernicious.

LAND and capital ſtock are the two original ſources of all re⯑venue both private and public. Capital ſtock pays the wages of productive labour, whether employed in agriculture, manufactures, or commerce. The management of thoſe two original ſources of revenue belongs to two different ſetts of people; the proprietors of land, and the owners or employers of capital ſtock.

THE proprietor of land is intereſted for the ſake of his own revenue to keep his eſtate in as good condition as he can, by build⯑ing and repairing his tenants houſes, by making and maintaining the neceſſary drains and encloſures, and all thoſe other expenſive improvements which it properly belongs to the landlord to make and maintain. But by different land-taxes the revenue of the landlord may be ſo much diminiſhed; and by different duties upon the neceſſaries and conveniencies of life, that diminiſhed revenue may be rendered of ſo little real value, that he may find himſelf altogether unable to make or maintain thoſe expenſive improve⯑ments. When the landlord, however, ceaſes to do his part, it is altogether impoſſible that the tenant ſhould continue to do his. As the diſtreſs of the landlord increaſes, the agriculture of the country muſt neceſſarily decline.

WHEN by different taxes upon the neceſſaries and conveniencies of life, the owners and employers of capital ſtock find, that what⯑ever revenue they derive from it, will not, in a particular country, purchaſe the ſame quantity of thoſe neceſſaries and conveniencies, which an equal revenue would in almoſt any other; they will be diſpoſed to remove to ſome other. And when, in order to raiſe thoſe [561] taxes, all or the greater part of merchants and manufacturers, that is, all or the greater part of the employers of great capitals, come to be continually expoſed to the mortifying and vexatious viſits of the tax gatherers; this diſpoſition to remove will ſoon be changed into an actual removal. The induſtry of the country will neceſ⯑ſarily fall with the removal of the capital which ſupported it, and the ruin of trade and manufactures will follow the declenſion of agriculture.

To transfer from the owners of thoſe two great ſources of reve⯑nue, land and capital ſtock, from the perſons immediately intereſted in the good condition of every particular portion of land, and in the good management of every particular portion of capital ſtock, to another ſett of perſons, (the creditors of the public, who have no ſuch particular intereſt) the greater part of the revenue ariſing from either, muſt, in the long-run, occaſion both the neglect of land, and the waſte or removal of capital ſtock. A creditor of the public has no doubt a general intereſt in the proſperity of the agri⯑culture, manufactures, and commerce of the country; and con⯑ſequently in the good condition of its lands, and in the good ma⯑nagement of its capital ſtock. Should there be any general failure or declenſion in any of theſe things, the produce of the different taxes might no longer be ſufficient to pay him the annuity or in⯑tereſt which is due to him. But a creditor of the public, con⯑ſidered merely as ſuch, has no intereſt in the good condition of any particular portion of land, or in the good management of any particular portion of capital ſtock. As a creditor of the public he has no knowledge of any ſuch particular portion. He has no inſpection of it. He can have no care about it. Its ruin may in moſt caſes be unknown to him, and cannot directly affect him.

THE practice of funding has gradually enfeebled every ſtate which has adopted it. The Italian republics ſeem to have begun it. [562] Genoa and Venice, the only two remaining which can pretend to an independent exiſtence, have both been enfeebled by it. Spain ſeems to have learned the practice from the Italian republics, and (its taxes being probably leſs judicious than theirs) it has, in pro⯑portion to its natural ſtrength, been ſtill more enfeebled. The debts of Spain are of very old ſtanding. It was deeply in debt be⯑fore the end of the ſixteenth century, about a hundred years before England owed a ſhilling. France, notwithſtanding all its natural reſources, languiſhes under an oppreſſive load of the ſame kind. The republic of the United Provinces is as much enfeebled by its debts as either Genoa or Venice. Is it likely that in Great Britain alone a practice, which has brought either weakneſs or de⯑ſolation into every other country, ſhould prove altogether inno⯑cent?

THE ſyſtem of taxation eſtabliſhed in thoſe different countries, it may be ſaid, is inferior to that of England. I believe it is ſo. But it ought to be remembered, that when the wiſeſt government has exhauſted all the proper ſubjects of taxation, it muſt, in caſes of urgent neceſſity, have recourſe to improper ones. The wiſe republic of Holland has upon ſome occaſions been obliged to have recourſe to taxes as inconvenient as the greater part of thoſe of Spain. Another war begun before any conſiderable liberation of the publick revenue had been brought about, and growing in its progreſs as expenſive as the laſt war, may, from irreſiſtable neceſſity, render the Britiſh ſyſtem of taxation as oppreſſive as that of Hol⯑land, or even as that of Spain. To the honour of our preſent ſyſtem of taxation, indeed, it has hitherto given ſo little embar⯑raſſment to induſtry, that, during the courſe even of the moſt ex⯑penſive wars, the frugality and good conduct of individuals ſeems to have been able, by ſaving and accumulation, to repair all the breaches which the waſte and extravagance of government had [563] made in the general capital of the ſociety. At the concluſion of the late war, the moſt expenſive that Great Britain ever waged, her agriculture was as flouriſhing, her manufacturers as numerous and as fully employed, and her commerce as extenſive, as they had ever been before. The capital, therefore, which ſupported all thoſe different branches of induſtry, muſt have been equal to what it had ever been before. Since the peace, agriculture has been ſtill further improved, the rents of houſes have riſen in every town and village of the country, a proof of the increaſing wealth and reve⯑nue of the people; and the annual amount of the greater part of the old taxes, of the principal branches of the exciſe and cuſtoms in particular, has been continually increaſing, an equally clear proof of an increaſing conſumption, and conſequently of an in⯑creaſing produce, which could alone ſupport that conſumption. Great Britain ſeems to ſupport with eaſe, a burden which, half a century ago, nobody believed her capable of ſupporting. Let us not, however, upon this account raſhly conclude that ſhe is capa⯑ble of ſupporting any burden; nor even be too confident that ſhe could ſupport, without great diſtreſs, a burden a little greater than what has already been laid upon her.

WHEN national debts have once been accumulated to a certain degree, there is ſcarce, I believe, a ſingle inſtance of their having been fairly and completely paid. The liberation of the public revenue, if it has ever been brought about at all, has always been brought about by a bankruptcy; ſometimes by an avowed one, but always by a real one, though frequently by a pretended pay⯑ment.

THE raiſing of the denomination of the coin has been the moſt uſual expedient by which a real public bankruptcy has been diſ⯑guiſed under the appearance of a pretended payment. If a ſixpence, [564] for example, ſhould either by act of parliament or royal procla⯑mation be raiſed to the denomination of a ſhilling, and twenty ſix⯑pences to that of a pound ſterling; the perſon who under the old denomination had borrowed twenty ſhillings, or near four ounces of ſilver, would, under the new, pay with twenty ſixpences, or with ſomething leſs than two ounces. A national debt of about a hundred and twenty-eight millions, nearly the capital of the funded and unfunded debt of Great Britain, might in this manner be paid with about ſixty-four millions of our preſent money. It would indeed be a pretended payment only, and the creditors of the public would really be defrauded of ten ſhillings in the pound of what was due to them. The calamity too would extend much further than to the creditors of the public, and thoſe of every private perſon would ſuffer a proportionable loſs; and this without any advantage, but in moſt caſes with a great additional loſs, to the creditors of the public. If the creditors of the public indeed were generally much in debt to other people, they might in ſome meaſure compenſate their loſs by paying their creditors in the ſame coin in which the public had paid them. But in moſt countries the creditors of the public are, the greater part of them, wealthy people, who ſtand more in the relation of creditors than in that of debtors towards the reſt of their fellow citizens. A pretended payment of this kind, therefore, inſtead of alleviating, aggravates in moſt caſes the loſs of the creditors of the public; and with⯑out any advantage to the public extends the calamity to a great number of other innocent people. It occaſions a general and moſt pernicious ſubverſion of the fortunes of private people; enriching in moſt caſes the idle and profuſe debtor at the expence of the induſtrious and frugal creditor, and tranſporting a great part of the national capital, from the hands which were likely to encreaſe and improve it, to thoſe which are likely to diſſipate and deſtroy it. When it becomes neceſſary for a ſtate to diſſipate and deſtroy it. When it becomes neceſſary for a ſtate to [565] declare itſelf bankrupt, in the ſame manner as when it becomes neceſſary for an individual to do ſo, a fair, open, and avowed bank⯑ruptcy is always the meaſure which is both leaſt diſhonourable to the debtor, and leaſt hurtful to the creditor. The honour of a ſtate is ſurely very poorly provided for, when, in order to cover the diſgrace of a real bankruptcy, it has recourſe to a juggling trick of this kind, ſo eaſily ſeen through, and at the ſame time ſo extremely pernicious.

ALMOST all ſtates, however, antient as well as modern, when reduced to this neceſſity, have, upon ſome occaſions, played this very juggling trick. The Romans, at the end of the firſt punic war, reduced the As, the coin or denomination by which they computed the value of all their other coins, from containing twelve ounces of copper to contain only two ounces; that is, they raiſed two ounces of copper to a denomination which had always before expreſſed the value of twelve ounces. The republic was, in this manner, enabled to pay the great debts which it had contracted with the ſixth part of what it really owed. So ſudden and ſo great a bankruptcy, we ſhould in the preſent times be apt to imagine, muſt have occa⯑ſioned a very violent popular clamour. It does not appear to have occaſioned any. The law which enacted it was, like all other laws relating to the coin, introduced and carried through the aſſembly of the people by a tribune, and was probably a very popular law. In Rome, as in all the other antient republics, the poor people were conſtantly in debt to the rich and the great, who, in order to ſecure their votes at the annual elections, uſed to lend them money at exorbitant intereſt, which, being never paid, ſoon accumulated into a ſum too great either for the debtor to pay, or for any body elſe to pay for him. The debtor, for fear of a very ſevere execu⯑tion, was obliged, without any further gratuity, to vote for the candidate whom the creditor recommended. In ſpite of all the [566] laws againſt bribery and corruption, the bounty of the candidates, together with the occaſional diſtributions of corn, which were ordered by the ſenate, were the principal funds from which, during the later times of the Roman republic, the poorer citizens derived their ſubſiſtence. To deliver themſelves from this ſubjection to their creditors, the poorer citizens were continually calling out either for an entire abolition of debts, or for what they called New Tables; that is, for a law which ſhould entitle them to a complete acquittance, upon paying only a certain proportion of their accu⯑mulated debts. The law which reduced the coin of all denomina⯑tions to a ſixth part of its former value, as it enabled them to pay their debts with a ſixth part of what they really owed, was equiva⯑lent to the moſt advantageous new tables. In order, to ſatisfy the people, the rich and the great were, upon ſeveral different occa⯑ſions, obliged to conſent to laws both for aboliſhing debts, and for introducing new tables; and they probably were induced to con⯑ſent to this law, partly for the ſame reaſon, and partly that by libe⯑rating the public revenue, they might reſtore vigour to that govern⯑ment of which they themſelves had the principal direction. An operation of this kind would at once reduce a debt of a hundred and twenty-eight millions to twenty-one millions, three hundred and thirty-three thouſand, three hundred and thirty-three pounds, ſix ſhillings and eight-pence. In the courſe of the ſecond punic war the As was ſtill further reduced, firſt, from two ounces of copper to one ounce; and afterwards from one ounce to half an ounce; that is, to the twenty-fourth part of its original value. By combining the three Roman operations into one, a debt of a hundred and twenty-eight millions of our preſent money, might in this manner be reduced all at once to a debt of five millions, three hundred and thirty-three thouſand, three hundred and thirty-three pounds, ſix ſhillings and eight-pence. Even the enormous debt of Great Britain might in this manner ſoon be paid.

[567] BY means of ſuch expedients the coin of, I believe, all nations has been gradually reduced more and more below its original value, and the ſame nominal ſum has been gradually brought to contain a ſmaller and a ſmaller quantity of ſilver.

NATIONS have ſometimes, for the ſame purpoſe, adulterated the ſtandard of their coin; that is, have mixed a greater quantity of alloy in it. If in the pound weight of our ſilver coin, for exam⯑ple, inſtead of eighteen penny weight, according to the preſent ſtandard, there was mixed eight ounces of alloy; a pound ſterling, or twenty ſhillings of ſuch coin, would be worth little more than ſix ſhillings and eight-pence of our preſent money. The quan⯑tity of ſilver contained in ſix ſhillings and eight-pence of our pre⯑ſent money, would thus be raiſed very nearly to the denomination of a pound ſterling. The adulteration of the ſtandard has exactly the ſame effect with what the French call an augmentation, or a direct raiſing of the denomination of the coin.

AN augmentation, or a direct raiſing of the denomination of the coin, always is, and from its nature muſt be, an open and avowed operation. By means of it pieces of a ſmaller weight and bulk are called by the ſame name which had before been given to pieces of a greater weight and bulk. The adulteration of the ſtandard, on the contrary, has generally been a concealed operation. By means of it pieces were iſſued from the mint of the ſame denominations, and, as nearly as could be contrived, of the ſame weight, bulk, and appearance, with pieces which had been current before of much greater value. When king John of France ^*, in order to pay his debts, adulterated his coin, all the officers of his mint were ſworn to ſecreſy. Both operations are unjuſt. But a ſimple augmenta⯑tion is an injuſtice of open violence; whereas an adulteration is an injuſtice of treacherous fraud. This latter operation, therefore, as [568] ſoon as it has been diſcovered, and it could never be concealed very long, has always excited much greater indignation than the former. The coin, after any conſiderable augmentation, has very ſeldom been brought back to its former weight; but after the greateſt adulterations it has almoſt always been brought back to its former fineneſs. It has ſcarce ever happened that the fury and indignation of the people could otherwiſe be appeaſed.

IN the end of the reign of Henry VIII. and in the beginning of that of Edward VI. the Engliſh coin was not only raiſed in its denomination, but adulterated in its ſtandard. The like frauds were practiſed in Scotland during the minority of James VI. They have occaſionally been practiſed in moſt other countries.

THAT the public revenue of Great Britain can ever be com⯑pletely liberated, or even that any conſiderable progreſs can ever be made towards that liberation, while the ſurplus of that revenue, or what is over and above defraying the annual expence of the peace eſtabliſhment, is ſo very ſmall, it ſeems altogether in vain to expect. That liberation, it is evident, can never be brought about without either ſome very conſiderable augmentation of the public revenue, or ſome equally conſiderable reduction of the public expence.

A MORE equal land-tax, a more equal tax upon the rent of houſes, and ſuch alterations in the preſent ſyſtem of cuſtoms and exciſe as thoſe which have been mentioned in the foregoing chapter, might, perhaps, without increaſing the burden of the greater part of the people, but only diſtributing the weight of it more equally upon the whole, produce a conſiderable augmentation of revenue. The moſt ſanguine projector, however, could ſcarce flatter himſelf that any augmentation of this kind would be ſuch as could give any reaſonable hopes either of liberating the public revenue alto⯑gether, [569] or even of making ſuch progreſs towards that liberation in time of peace, as either to prevent or to compenſate the further accumulation of the public debt in the next war.

BY extending the Britiſh ſyſtem of taxation to all the different provinces of the empire inhabited by people either of Britiſh or Eu⯑ropean extraction, a much greater augmentation of revenue might be expected. This, however, could ſcarce perhaps be done, conſiſt⯑ently with the principles of the Britiſh conſtitution, without admit⯑ting into the Britiſh parliament, or if you will into the ſtates gene⯑ral of the Britiſh Empire, a fair and equal repreſentation of all thoſe different provinces, that of each province bearing the ſame proportion to the produce of its taxes, as the repreſentation of Great Britain might bear to the produce of the taxes levied upon Great Britain. The private intereſt of many powerful individuals, the confirmed prejudices of great bodies of people ſeem, indeed, at preſent, to oppoſe to ſo great a change ſuch obſtacles as it may be very difficult, perhaps altogether impoſſible, to ſurmount. With⯑out, however, pretending to determine whether ſuch a union be practicable or impracticable, it may not, perhaps, be improper, in a ſpeculative work of this kind, to conſider how far the Britiſh ſyſtem of taxation might be applicable to all the different provinces of the empire; what revenue might be expected from it if ſo applied, and in what manner a general union of this kind might be likely to affect the happineſs and proſperity of the different pro⯑vinces comprehended within it. Such a ſpeculation can at worſt be regarded but as a new Utopia, leſs amuſing certainly, but not more uſeleſs and chimerical than the old one.

THE land-tax, the ſtamp duties, and the different duties of cuſtoms and exciſe, conſtitute the four principal branches of the Britiſh taxes.

[570] IRELAND is certainly as able, and our American and Weſt Indian plantations more able to pay a land-tax than Great Bri⯑tain. Where the landlord is ſubject neither to tithe nor poors rate, he muſt certainly be more able to pay ſuch a tax, than where he is ſubject to both thoſe other burdens. The tithe, where there is no modus, and where it is levied in kind, diminiſhes more what would otherwiſe be the rent of the landlord, than a land⯑tax which really amounted to five ſhillings in the pound. Such a tithe will be found in moſt caſes to amount to more than a fourth part of the real rent of the land, or of what remains after replacing compleatly the capital of the farmer, together with his reaſonable profit. If all moduſes and all impropriations were taken away, the complete church tithe of Great Britain and Ire⯑land, could not well be eſtimated at leſs than ſix or ſeven mil⯑lions. If there was no tithe either in Great Britain or Ireland, the landlords could afford to pay ſix or ſeven millions additional land-tax, without being more burdened than a very great part of them are at preſent. America pays no tithe, and could therefore very well afford to pay a land-tax. The lands in America and the Weſt Indies, indeed, are in general not tenanted or leaſed out to farmers. They could not therefore be aſſeſſed according to any rent-roll. But neither were the lands of Great Britain, in the 4th of William and Mary, aſſeſſed according to any rent⯑roll, but according to a very looſe and inaccurate eſtimation. The lands in America might be aſſeſſed either in the ſame manner, or according to an equitable valuation in conſequence of an accurate ſurvey, like that which was lately made in the Milaneſe, and in the dominions of Auſtria, Pruſſia, and Sardinia.

STAMP-DUTIES, it is evident, might be levied without any variation in all countries where the forms of law proceſs, and the deeds by which property both real and perſonal is transferred, are the ſame or nearly the ſame.

[571] THE extenſion of the cuſtomhouſe laws of Great Britain to Ireland and the plantations, provided it was accompanied, as in juſtice it ought to be, with an extenſion of the freedom of trade, would be in the higheſt degree advantageous to both. All the invidious reſtraints which at preſent oppreſs the trade of Ireland, the diſtinction between the enumerated and non-enumerated com⯑modities of America, would be entirely at an end. The coun⯑tries north of Cape Finiſterre would be as open to every part of the produce of America, as thoſe ſouth of that cape are to ſome parts of that produce at preſent. The trade between all the different parts of the Britiſh empire would, in conſequence of this uniformity in the cuſtomhouſe laws, be as free as the coaſt⯑ing trade of Great Britain is at preſent. The Britiſh empire would thus afford within itſelf an immenſe internal market for every part of the produce of all its different provinces. So great an extenſion of market would ſoon compenſate both to Ireland and the plantations, all that they could ſuffer from the increaſe of the duties of cuſtoms.

THE exciſe is the only part of the Britiſh ſyſtem of taxation, which would require to be varied in any reſpect according as it was applied to the different provinces of the empire. It might be applied to Ireland without any variation; the produce and conſumption of that kingdom being exactly of the ſame nature with thoſe of Great Britain. In its application to America and the Weſt Indies, of which the produce and conſumption are ſo very different from thoſe of Great Britain, ſome modification might be neceſſary, in the ſame manner as in its application to the cyder and beer counties of England.

A FERMENTED liquor, for example, which is called beer, but which, as it is made of melaſſes, bears very little reſemblance to our beer, makes a conſiderable part of the common drink of the people in America. This liquor, as it can be kept only for a few [572] days, cannot, like our beer, be prepared and ſtored up for ſale in great breweries; but every private family muſt brew it for their own uſe, in the ſame manner as they cook their victuals. But to ſubject every private family to the odious viſits and examination of the tax gatherers, in the ſame manner as we ſubject the keepers of alehouſes and the brewers for public ſale, would be altogether inconſiſtent with liberty. If for the ſake of equality it was thought neceſſary to lay a tax upon this liquor, it might be taxed by taxing the material of which it is made, either at the place of manufacture, or, if the circumſtances of the trade ren⯑dered ſuch an exciſe improper, by laying a duty upon its importa⯑tion into the colony in which it was to be conſumed. Beſides the duty of one penny a gallon impoſed by the Britiſh parliament upon the importation of melaſſes into America; there is a provincial tax of this kind upon their importation into Maſſachuſets Bay, in ſhips belonging to any other colony, of eight-pence the hogſhead; and another upon their importation, from the northern colonies, into South Carolina of five-pence the gallon. Or if neither of theſe methods was found convenient, each family might compound for its conſumption of this liquor, either according to the number of perſons of which it conſiſted, in the ſame manner as private families compound for the malt-tax in England; or accoding to the different ages and ſexes of thoſe perſons, in the ſame manner as ſeveral different taxes are levied in Holland; or nearly as Sir Mathew Decker propoſes that all taxes upon conſumable com⯑modities ſhould be levied in England. This mode of taxation, it has already been obſerved, when applied to objects of a ſpeedy conſumption, is not a very convenient one. It might be adopted, however, in caſes where no better could be done.

SUGAR, rum, and tobacco, are commodities which are no where neceſſaries of life, which are become objects of almoſt uni⯑verſal conſumption, and which are therefore extreamly proper ſub⯑jects [573] of taxation. If a union with the colonies was to take place, thoſe commodities might be taxed either before they go out of the hands of the manufacturer or grower; or if this mode of taxation did not ſuit the circumſtances of thoſe perſons, they might be depoſited in public warehouſes both at the place of ma⯑nufacture, and at all the different ports of the empire to which they might afterwards be tranſported, to remain there, under the joint cuſtody of the owner and the revenue officer, till ſuch time as they ſhould be delivered out either to the conſumer, to the merchant retailer for home conſumption, or to the merchant exporter; the tax not to be advanced till ſuch delivery. When delivered out for exportation, to go duty free; upon proper ſecu⯑rity being given that they ſhould really be exported out of the empire. Theſe are perhaps the principal commodities with regard to which a union with the colonies might require ſome conſiderable change in the preſent ſyſtem of Britiſh taxation.

WHAT might be the amount of the revenue which this ſyſtem of taxation extended to all the different provinces of the empire might produce, it muſt, no doubt, be altogether impoſſible to aſcertain with tolerable exactneſs. By means of this ſyſtem there is annually levied in Great Britain; upon leſs than eight millions of people, more than ten millions of revenue. Ireland contains more than two millions of people, and according to the accounts laid before the congreſs, the twelve aſſociated provinces of America contain more than three. Thoſe accounts, however, may have been exaggerated, in order, perhaps, either to encourage their own people, or to intimidate thoſe of this country, and we ſhall ſuppoſe therefore that our North American and Weſt Indian co⯑lonies taken together contain no more than three millions; or that the whole Britiſh empire, in Europe and America, contains no more than thirteen millions of inhabitants. If upon leſs than [574] eight millions of inhabitants this ſyſtem of taxation raiſes a re⯑venue of more than ten millions ſterling; it ought upon thirteen millions of inhabitants to raiſe a revenue of more than ſixteen millions two hundred and fifty thouſand pounds ſterling. From this revenue, ſuppoſing that this ſyſtem could produce it, muſt be deducted, the revenue uſually raiſed in Ireland and the planta⯑tions for defraying the expence of their reſpective civil govern⯑ments. The expence of the civil and military eſtabliſhment of Ireland, together with the intereſt of the public debt, amounts at a medium of the two years which ended March, 1775, to ſomething leſs than ſeven hundred and fifty thouſand pounds a year. By a very exact account of the revenue of the principal colonies of America and the Weſt Indies, it amounted, before the commencement of the late diſturbances, to a hundred and forty-one thouſand eight hundred pounds. In this account, however, the revenue of Maryland, of North Carolina, and of all our late acquiſitions both upon the continent and in the iſlands, is omitted, which may perhaps make a difference of thirty or forty thouſand pounds. For the ſake of even numbers therefore, let us ſuppoſe that the revenue neceſſary for ſupporting the civil government of Ireland, and the plantations, may amount to a million. There would remain conſequently a revenue of fifteen millions two hun⯑dred and fifty thouſand pounds, to be applied towards defraying the general expence of the empire, and towards paying the public debt. But if from the preſent revenue of Great Britain a mil⯑lion could in peaceable times be ſpared towards the payment of that debt, ſix millions two hundred and fifty thouſand pounds could very well be ſpared from this improved revenue. This great ſinking fund too might be augmented every year by the intereſt of the debt which had been diſcharged the year before, and might in this manner increaſe ſo very rapidly, as to be ſufficient in a few years to diſcharge the whole debt, and thus to reſtore compleatly the at preſent debilitated and languiſhing vigour of the empire. [575] In the meantime the people might be relieved from ſome of the moſt burdenſome taxes; from thoſe which are impoſed either upon the neceſſaries of life, or upon the materials of manufacture. The labouring poor would thus be enabled to live better, to work cheaper, and to ſend their goods cheaper to market. The cheap⯑neſs of their goods would increaſe the demand for them, and conſequently for the labour of thoſe who produced them. This increaſe in the demand for labour, would both increaſe the numbers and improve the circumſtances of the labouring poor. Their conſumption would increaſe, and together with it the revenue ariſing from all thoſe articles of their conſumption upon which the taxes might be allowed to remain.

THE revenue ariſing from this ſyſtem of taxation, however, might not immediately increaſe in proportion to the number of people who were ſubjected to it. Great indulgence would for ſome time be due to thoſe provinces of the empire which were thus ſub⯑jected to burthens to which they had not before been accuſtomed, and even when the ſame taxes came to be levied every where as exactly as poſſible, they would not every where produce a revenue proportioned to the numbers of the people. In a poor country the conſumption of the principal commodities ſubject to the duties of cuſtoms and exciſe is very ſmall; and in a thinly inhabited country the opportunities of ſmuggling are very great. The con⯑ſumption of malt liquors among the inferior ranks of people in Scotland is very ſmall, and the exciſe upon malt, beer, and ale, produces leſs there than in England in proportion to the numbers of the people and the rate of the duties, which upon malt is dif⯑ferent on account of a ſuppoſed difference of quality. In theſe particular branches of the exciſe there is not, I apprehend, much more ſmuggling in the one country than in the other. The duties upon the diſtillery, and the greater part of the duties of cuſtoms, [576] in proportion to the numbers of people in the reſpective countries, produce leſs in Scotland than in England, not only on account of the ſmaller conſumption of the taxed commodities, but of the much greater facility of ſmuggling. In Ireland, the inferior ranks of people are ſtill poorer than in Scotland, and many parts of the country are almoſt as thinly inhabited. In Ireland, therefore, the conſumption of the taxed commodities might, in proportion to the number of the people, be ſtill leſs than in Scotland, and the facility of ſmuggling nearly the ſame. In America and the Weſt Indies the white people even of the loweſt rank are in much better circumſtances than thoſe of the ſame rank in England, and their conſumption of all the luxuries in which they uſually indulge themſelves is probably much greater. The blacks, indeed, who make the greater part of the inhabitants both of the ſouthern colonies upon the continent and of the Weſt Indian iſlands, as they are in a ſtate of ſlavery, are, no doubt, in a worſe condition than the pooreſt people either in Scotland or Ireland. We muſt not, however, upon that account, imagine that they are worſe fed, or that their conſumption of articles which might be ſubjected to moderate duties, is leſs than that even of the lower ranks of people in England. In order that they may work well, it is the intereſt of their maſter that they ſhould be fed well and kept in good heart, in the ſame manner as it is his intereſt that his working cattle ſhould be ſo. The blacks accordingly have almoſt every where their allowance of rum and of melaſſes or ſpruce beer, in the ſame manner as the white ſervants; and this allowance would not probably be withdrawn, though thoſe articles ſhould be ſub⯑jected to moderate duties. The conſumption of the taxed commodi⯑ties, therefore, in proportion to the number of inhabitants, would probably be as great in America and the Weſt Indies as in any part of the Britiſh empire. The opportunities of ſmuggling, indeed, would be much greater; America, in proportion to the [577] extent of the country, being much more thinly inhabited than either Scotland or Ireland. If the revenue, however, which is at preſent raiſed by the different duties upon malt and malt liquors, was to be levied by a ſingle duty upon malt, the opportunity of ſmuggling in the moſt important branch of the exciſe would be almoſt entirely taken away: And if the duties of cuſtoms, inſtead of being impoſed upon almoſt all the different artioles of impor⯑tation, were confined to a few of the moſt general uſe and con⯑ſumption, and if the levying of thoſe duties was ſubjected to the exciſe laws, the opportunity of ſmuggling, though not ſo entirely taken away, would be very much diminiſhed. In conſequence of thoſe two, apparently, very ſimple and eaſy alterations, the duties of cuſtoms and exciſe might probably produce a revenue as great in proportion to the conſumption of the moſt thinly inhabited pro⯑vince as they do at preſent in proportion to that of the moſt po⯑pulous.

THE Americans, it has been ſaid, indeed, have no gold or ſilver money; the interior commerce of the country being carried on by a paper currency, and the gold and ſilver which occaſionally come among them being all ſent to Great Britain in return for the commodities which they receive from us. But without gold and ſilver, it is added, there is no poſſibility of paying taxes. We already get all the gold and ſilver which they have. How is it poſſible to draw from them what they have not?

THE preſent ſcarcity of gold and ſilver money in America is not the effect of the poverty of that country, or of the inability of the people there to purchaſe thoſe metals. In a country where the wages of labour are ſo much higher, and the price of pro⯑viſions ſo much lower than in England, the greater part of the people muſt ſurely have wherewithal to purchaſe a greater quantity, [578] if it was either neceſſary or convenient for them to do ſo. The ſcarcity of thoſe metals, therefore, muſt be the effect of choice, and not of neceſſity.

IT is for tranſacting either domeſtic or foreign buſineſs, that gold and ſilver money is either neceſſary or convenient.

THE domeſtic buſineſs of every country, it has been ſhewn in the ſecond book of this inquiry, may, at leaſt in peaceable times, be tranſacted by means of a paper currency, with nearly the ſame degree of conveniency as by gold and ſilver money. It is con⯑venient for the Americans, who could always employ with profit in the improvement of their lands a greater ſtock than they can eaſily get, to ſave as much as poſſible the expence of ſo coſtly an inſtrument of commerce as gold and ſilver, and rather to employ that part of their ſurplus produce which would be neceſſary for purchaſing thoſe metals, in purchaſing the inſtruments of trade, the materials of cloathing, ſeveral parts of houſhold furniture, and the iron-work neceſſary for building and extending their ſettlements and plantations; in purchaſing, not dead ſtock, but active and productive ſtock. The colony governments find it for their intereſt to ſupply people with ſuch a quantity of paper⯑money as is fully ſufficient and generally more than ſufficient for tranſacting their domeſtic buſineſs. Some of thoſe governments, that of Penſylvania particularly, derive a revenue from lending this paper-money to their ſubjects at an intereſt of ſo much per⯑cent. Others, like that of Maſſachuſet's Bay, advance upon extraordinary emergencies a paper-money of this kind for de⯑fraying the public expence, and afterwards, when it ſuits the conveniency of the colony, redeem it at the depreciated value to which it gradually falls. In 1747 ^* that colony paid, in this man⯑ner, the greater part of its public debts, with the tenth part of [579] the money for which its bills had been granted. It ſuits the con⯑veniency of the planters to ſave the expence of employing gold and ſilver money in their domeſtic tranſactions; and it ſuits the conve⯑niency of the colony governments to ſupply them with a medium, which, though attended with ſome very conſiderable diſadvantages, enables them to ſave that expence. The redundancy of paper mo⯑ney neceſſarily baniſhes gold and ſilver from the domeſtic tranſac⯑tions of the colonies, for the ſame reaſon that it has baniſhed thoſe metals from the greater part of the domeſtic tranſactions of Scot⯑land; and in both countries it is not the poverty, but the enter⯑priſing and projecting ſpirit of the people, their deſire of employ⯑ing all the ſtock which they can get as active and productive ſtock, which has occaſioned this redundancy of paper money.

IN the exterior commerce which the different colonies carry on with Great Britain, gold and ſilver are more or leſs employed, exactly in proportion as they are more or leſs neceſſary. Where thoſe metals are not neceſſary, they ſeldom appear. Where they are neceſſary, they are generally found.

IN the commerce between Great Britain and the tobacco colo⯑nies, the Britiſh goods are generally advanced to the coloniſts at a pretty long credit, and are afterwards paid for in tobacco, rated at a certain price. It is more convenient for the coloniſts to pay in tobacco than in gold and ſilver. It would be more convenient for any merchant to pay for the goods which his correſpondents had ſold to him in ſome other ſort of goods which he might happen to deal in, than in money. Such a merchant would have no occaſion to keep any part of his ſtock by him unemployed, and in ready money, for anſwering occaſional demands. He could have, at all times, a larger quantity of goods in his ſhop or warehouſe, and he could deal to a greater extent. But it ſeldom happens to be con⯑venient [580] for all the correſpondents of a merchant to receive pay⯑ment for the goods which they ſell to him, in goods of ſome other kind which he happens to deal in. The Britiſh merchants who trade to Virginia and Maryland happen to be a particular ſett of correſpondents, to whom it is more convenient to receive payment for the goods which they ſell to thoſe colonies in tobacco than in gold and ſilver. They expect to make a profit by the ſale of the tobacco. They could make none by that of the gold and ſilver. Gold and ſilver, therefore, very ſeldom appear in the commerce between Great Britain and the tobacco colonies. Maryland and Virginia have as little occaſion for thoſe metals in their foreign as in their domeſtic commerce. They are ſaid, accordingly, to have leſs gold and ſilver money than any other colonies in Ame⯑rica. They are reckoned, however, as thriving, and conſequently as rich as any of their neighbours.

IN the northern colonies, Penſylvania, New York, New Jerſey, the four governments of New England, &c. the value of their own produce which they export to Great Britain is not equal to that of the manufactures which they import for their own uſe, and for that of ſome of the other colonies to which they are the carriers. A balance, therefore, muſt be paid to the mother country in gold and ſilver, and this balance they generally find.

IN the ſugar colonies the value of the produce annually exported to Great Britain is much greater than that of all the goods imported from thence. If the ſugar and rum annually ſent to the mother country were paid for in thoſe colonies, Great Britain would be obliged to ſend out every year a very large balance in money, and the trade to the Weſt Indies would, by a certain ſpecies of politi⯑cians, be conſidered as extremely diſadvantageous. But it ſo hap⯑pens, that many of the principal proprietors of the ſugar planta⯑tions reſide in Great Britain. Their rents are remitted to them in [581] ſugar and rum, the produce of their eſtates. The ſugar and rum which the Weſt India merchants purchaſe in thoſe colonies upon their own account, are not equal in value to the goods which they annually ſell there. A balance, therefore, muſt generally be paid to them in gold and ſilver, and this balance too is generally found.

THE difficulty and irregularity of payment from the different colonies to Great Britain, have not been at all in proportion to the greatneſs or ſmallneſs of the balances which were reſpectively due from them. Payments have in general been more regular from the northern than from the tobacco colonies, though the former have generally paid a pretty large balance in money, while the lat⯑ter have paid either no balance, or a much ſmaller one. The diffi⯑culty of getting payment from our different ſugar colonies has been greater or leſs in proportion, not ſo much to the extent of the balances reſpectively due from them, as to the quantity of uncul⯑tivated land which they contained; that is, to the greater or ſmaller temptation which the planters have been under of over-trading, or of undertaking the ſettlement and plantation of greater quantities of waſte land than ſuited the extent of their capitals. The returns from the great iſland of Jamaica, where there is ſtill much uncul⯑tivated land, have, upon this account, been in general more irre⯑gular and uncertain than thoſe from the ſmaller iſlands of Barba⯑does, Antigua, and St. Chriſtophers, which have for theſe many years been completely cultivated, and have, upon that account, afforded leſs field for the ſpeculations of the planter. The new acquiſitions of Grenada, Tobago, St. Vincents, and Dominica, have opened a new field for ſpeculations of this kind; and the returns from thoſe iſlands have of late been as irregular and uncertain as thoſe from the great iſland of Jamaica.

IT is not, therefore, the poverty of the colonies which occaſions, in the greater part of them, the preſent ſcarcity of gold and ſilver [582] money. Their great demand for active and productive ſtock makes it convenient for them to have as little dead ſtock as poſſible; and diſpoſes them upon that account to content them⯑ſelves with a cheaper, though leſs commodious inſtrument of com⯑merce than gold and ſilver. They are thereby enabled to con⯑vert the value of that gold and ſilver into the inſtruments of trade, into the materials of cloathing, into houſhold furniture, and into the iron work neceſſary for building and extending their ſettle⯑ments and plantations. In thoſe branches of buſineſs which can⯑not be tranſacted without gold and ſilver money, it appears that they can always find the neceſſary quantity of thoſe metals; and if they frequently do not find it, their failure is generally the effect, not of their neceſſary poverty, but of their unneceſſary and exceſ⯑ſive enterprize. It is not becauſe they are poor that their payments are irregular and uncertain; but becauſe they are too eager to become exceſſively rich. Though all that part of the produce of the colony taxes, which was over and above what was neceſſary for defraying the expence of their own civil and military eſtabliſh⯑ments, were to be remitted to Great Britain in gold and ſilver, the colonies have abundantly wherewithal to purchaſe the requiſite quantity of thoſe metals. They would in this caſe be obliged, indeed, to exchange a part of their ſurplus produce, with which they now purchaſe active and productive ſtock, for dead ſtock. In tranſacting their domeſtic buſineſs they would be obliged to employ a coſtly inſtead of a cheap inſtrument of commerce; and the ex⯑pence of purchaſing this coſtly inſtrument might damp ſomewhat the vivacity and ardour of their exceſſive enterprize in the improve⯑ment of land. It might not, however, be neceſſary to remit any part of the American revenue in gold and ſilver. It might be remit⯑ted in bills drawn upon and accepted by particular merchants or companies in Great Britain, to whom a part of the ſurplus produce of America had been conſigned, who would pay into the treaſury the American revenue in money, after having themſelves received [583] the value of it in goods; and the whole buſineſs might frequently be tranſacted without exporting a ſingle ounce of gold and ſilver from America.

IT is not contrary to juſtice that both Ireland and America ſhould contribute towards the diſcharge of the public debt of Great Britain. That debt has been contracted in ſupport of the government eſtabliſhed by the revolution, a government to which the proteſtants of Ireland owe, not only the whole authority which they at preſent enjoy in their own country, but every ſecu⯑rity which they poſſeſs for their liberty, their property, and their religion; a government to which ſeveral of the colonies of America owe their preſent charters, and conſequently their preſent conſti⯑tution, and to which all the colonies of America owe the liberty, ſecurity, and property, which they have ever ſince enjoyed. That public debt has been contracted in the defence, not of Great Bri⯑tain alone, but of all the different provinces of the empire; the immenſe debt contracted in the late war in particular, and a great part of that contracted in the war before, were both properly con⯑tracted in defence of America.

BY a union with Great Britain, Ireland would gain, beſides the freedom of trade, other advantages much more important, and which would much more than compenſate any increaſe of taxes that might accompany that union. By the union with England, the middling and inferior ranks of people in Scotland gained a com⯑plete deliverance from the power of an ariſtocracy which had al⯑ways before oppreſſed them. By a union with Great Britain the greater part of the people of all ranks in Ireland would gain an equally complete deliverance from a much more oppreſſive ariſto⯑cracy; an ariſtocracy not founded, like that of Scotland, in the natural and reſpectable diſtinctions of birth and fortune; but in [584] the moſt odious of all diſtinctions, thoſe of religious and political prejudices; diſtinctions which more than any other animate both the inſolence of the oppreſſors and the hatred and indignation of the oppreſſed, and which commonly render the inhabitants of the ſame country more hoſtile to one another than thoſe of different coun⯑tries ever are. Without a union with Great Britain, the inhabi⯑tants of Ireland are not likely for many ages to conſider themſelves as one people.

NO oppreſſive ariſtocracy has ever prevailed in the colonies. Even they, however, would, in point of happineſs and tranquillity, gain conſiderably by a union with Great Britain. It would, at leaſt, deliver them from thoſe rancorous and virulent factions which are inſeparable from ſmall democracies, and which have ſo frequently divided the affections of their people, and diſturbed the tranquillity of their governments, in their form ſo nearly democra⯑tical. In the caſe of a total ſeparation from Great Britain, which, unleſs prevented by a union of this kind, ſeems very likely to take place, thoſe factions would be ten times more virulent than ever. Before the commencement of the preſent diſturbances, the coercive power of the mother country had always been able to reſtrain thoſe factions from breaking out into any thing worſe than groſs bru⯑tality and inſult. If that coercive power was entirely taken away, they would probably ſoon break out into open violence and blood⯑ſhed. In all great countries which are united under one uniform government, the ſpirit of party commonly prevails leſs in the remote provinces, than in the center of the empire. The diſtance of thoſe provinces from the capital, from the principal ſeat of the great ſcramble of faction and ambition, makes them enter leſs into the views of any of the contending parties, and renders them more indifferent and impartial ſpectators of the conduct of all. The ſpirit of party prevails leſs in Scotland than in England. [585] In the caſe of a union it would probably prevail leſs in Ireland than in Scotland, and the colonies would probably ſoon enjoy a degree of concord and unanimity at preſent unknown in any part of the Britiſh empire. Both Ireland and the colonies, indeed, would be ſubjected to heavier taxes than any which they at preſent pay. In conſequence, however, of a diligent and faithful appli⯑cation of the public revenue towards the diſcharge of the national debt, the greater part of thoſe taxes might not be of long conti⯑nuance, and the public revenue of Great Britain might ſoon be reduced to what was neceſſary for maintaining a moderate peace eſtabliſhment.

THE territorial acquiſitions of the Eaſt India company, the un⯑doubted right of the crown, that is, of the ſtate and people of Great Britain, might be rendered another ſource of revenue more abundant perhaps than all thoſe already mentioned. Thoſe coun⯑tries are repreſented as more fertile, more extenſive; and in pro⯑portion to their extent much richer and more populous than Great Britain. In order to draw a great revenue from them, it would not probably be neceſſary to introduce any new ſyſtem of taxation into countries which are already ſufficiently and more than ſuffi⯑ciently taxed. It might perhaps be more proper to lighten than to aggravate the burden of thoſe unfortunate countries, and to en⯑deavour to draw a revenue from them, not by impoſing new taxes, but by preventing the embezzlement and miſapplication of the greater part of thoſe which they already pay.

IF it ſhould be found impracticable for Great Britain to draw any conſiderable augmentation of revenue from any of the re⯑ſources above-mentioned; the only reſource which can remain to her is a diminution of her expence. In the mode of collecting and in that of expending the public revenue; though in both [586] there may be ſtill room for improvement; Great Britain ſeems to be at leaſt as oeconomical as any of her neighbours. The mi⯑litary eſtabliſhment which ſhe maintains for her own defence in time of peace, is more moderate than that of any European ſtate which can pretend to rival her either in wealth or in power. None of thoſe articles, therefore, ſeem to admit of any conſider⯑able reduction of expence. The expence of the peace eſtabliſh⯑ment of the colonies was, before the commencement of the pre⯑ſent diſturbances, very conſiderable, and is an expence which may, and if no revenue can be drawn from them, ought cer⯑tainly to be ſaved altogether. This conſtant expence in time of peace, though very great, is inſignificant in compariſon with what the defence of the colonies has coſt us in time of war. The laſt war, which was undertaken altogether on account of the colonies, coſt Great Britain, it has already been obſerved, upwards of ninety millions. The Spaniſh war of 1739 was prin⯑cipally undertaken on their account; in which, and in the French war that was the conſequence of it, Great Britain ſpent up⯑wards of forty millions, a great part of which ought juſtly to be charged to the colonies. In thoſe two wars the colonies coſt Great Britain much more than double the ſum which the na⯑tional debt amounted to before the commencement of the firſt of them. Had it not been for thoſe wars that debt might, and probably would by this time have been compleatly paid; and had it not been for the colonies, the former of thoſe wars might not, and the latter certainly would not have been undertaken. It was becauſe the colonies were ſuppoſed to be provinces of the Britiſh empire, that this expence was laid out upon them. But countries which contribute neither revenue nor military force to⯑wards the ſupport of the empire, cannot be conſidered as pro⯑vinces. They may perhaps be conſidered as appendages, as a ſort of ſplendid and ſhowy equipage of the empire. But if the [587] empire can no longer ſupport the expence of keeping up this equi⯑page, it ought certainly to lay it down; and if it cannot raiſe its revenue in proportion to its expence, it ought, at leaſt, to accommodate its expence to its revenue. If the colonies, not⯑withſtanding their refuſal to ſubmit to Britiſh taxes, are ſtill to be conſidered as provinces of the Britiſh empire, their defence in ſome future war may coſt Great Britain as great an expence as it ever has done in any former war. The rulers of Great Britain have for more than a century paſt amuſed the people with the imagination that they poſſeſſed a great empire on the weſt ſide of the Atlantic. This empire, however, has hitherto exiſted in imagination only. It has hitherto been, not an empire, but the project of an empire; not a gold mine, but the project of a gold mine; a project which has coſt, which continues to coſt, and which if purſued in the ſame way as it has been hitherto, is likely to coſt immenſe expence, without being likely to bring any profit; for the effects of the monopoly of the colony trade, it has been ſhewn, are, to the great body of the people, mere loſs inſtead of profit. It is ſurely now time that our rulers ſhould either realize this golden dream, in which they have been indulg⯑ing themſelves, perhaps, as well as the people; or, that they ſhould awake from it themſelves, and endeavour to awaken the people. If the project cannot be compleated, it ought to be given up. If any of the provinces of the Britiſh empire cannot be made to contribute towards the ſupport of the whole empire, it is ſurely time that Great Britain ſhould free herſelf from the expence of defending thoſe provinces in time of war, and of ſupporting any part of their civil or military eſtabliſhments in time of peace, and endeavour to accommodate her future views and deſigns to the real mediocrity of her circumſtances.